Borthwicks: half results in loss

Press, 2 June 1984, Page 23

Borthwicks: half results in loss

NZPA staff correspondent in London

Borthwicks, the international meat traders, reported a pre-tax loss of £BBB,OOO (about JNZI.9 million) for the half year to April 1. This compares with a pretax profit of £3.1 million (about JNZ6.B million) for the six months to April last year. After tax and minority interests there is a loss attributable to shareholders of £996,000 (about JNZ2.I million) against a profit of £1.9 million (about SNZ4.3 million) in 1983. This is equivalent to a loss per share of 1.93 pence, against earnings of 3.81 pence last time. Borthwicks had a pre-tax profit of £3.8 million (about JNZB.3 million) for the 12 months to October last year.

The group’s chairman (Richard Wheeler-Bennett) in his report to shareholders, says: “As I foreshadowed in my comments at the annual general meeting in January, although further progress has been made in some areas of the group’s operations in the first half of the current year, activity has started slowly, with the result that the performance in the meat processing sector has not fulfilled our hopes during the period.” This was a direct result of several adverse factors, few of which Borthwicks were in a oosition to control, Mr Wheeler-Bennett said. New Zealand trading operations had progressed well, and new products and markets were being developed. But wet weather there had again caused the season to run very late with a resultant delay to the start of profitable operations. On top of this, demands of E.E.C. inspection teams had caused considerable disruption to activities and significant unforeseen expenditure. Attempts to introduce planned cost reductions had

met with strong union resistance and industrial unrest, particularly at Longburn. “The combination of these factors has resulted in Borthwick-CWS falling well behind its profit budget in the half-year,” Mr WheelerBennett says. Unprecedented rainfall in Australia had resulted in farmers holding back stock, and there had been a considerable reduction in throughput in the Victorian works. In the U.K. the manufacturing and trading divisions had performed satisfactorily and were contributing well to the group’s operations. But, in the retail sector, Matthews Butchers had experienced difficult trading operations, restricting anticipated profits and leading to the closure of nearly 40 loss-making shops. Mr Wheeler-Bennett said borrowings continued to be kept under tight control and within budgeted levels. “It is unlikely that the outcome of our operations in the second half of the year can restore profits for the year as a whole to last year’s level, but our underlying strategy for the group’s activities continues on course,” he adds.