Company Reports & Accounts


By Roger Dean


Dugdale Nutrition Ltd This company presented its annual Accounts for the twelve months ending 30 April 2020 on 8 December 2020. The Directors reported that, operationally, the development of the


business into ‘a two-site operation has continued to go well with both sites now capable of producing 24/7 and staffed accordingly’. This impacted on the company’s fixed costs and this, along with a fall in volume, contributed to the company’s poor financial performance during the trading year under review. The company’s report gives a useful insight into the conditions


experienced by many feed manufacturers during the year. The trading year started with what the company described as the ‘hangover’ from the extremely mild spring of 2019, characterised by reduced volumes, large grass growth and a dropping market for raw materials. In particular, the carryover of surplus raw materials into a market characterised by falling prices for finished products and aggressive activity on the part of competitors in an already low volume summer had the inevitable consequences on margins and profitability. The company reported that ‘significant changes’ were made


throughout the business, including at the level of the Board of Directors. In a remarkably candid observation, the company stated that, although it made a trading loss for the first time in twenty years, ‘lessons have been learned, costs have been controlled and systems overhauled’. The company reported that volumes had returned to near record levels with margins returning to profit. The company reported that ‘the business continued to function


well throughout the Covid-19 pandemic’. While activity never actually ground to a halt, at one stage, over a quarter of the staff were absent from work due to suspected cases and isolation due to family members. Self-evidently, this constituted a significant cost to the business and ‘made an impact on what traditionally are the most profitable months of the trading year’. The company generated turnover amounting to £50.06 million in


the year to 30 April 2020, down from £54.16 million during the preceding financial period, a reduction of 7.6 per cent. After subtracting direct costs, Gross Profits amounted to £800,300, down 10 per cent on the preceding year. After the deduction of distribution and administrative expenses, operating profits of £395,350 during the preceding financial year turned into a loss of £463,910 in the year ending 30 April 2020. The Gross Profit ratio of 14.4 per cent in the financial year under


review was significantly below the ten-year average of 16.5 per cent, suggesting that the company, like many others, was operating in a highly competitive market with recovery of direct costs proving problematic. The trend in the Indirect Cost ratio has also shown a long-term tendency to increase. The company’s ultimate parent undertaking is B. Dugdale & Son


Ltd whose majority shareholders are Mr S. B. Dugdale and Mr J.R. Dugdale.


PAGE 22 JANUARY/FEBRUARY 2021 FEED COMPOUNDER


United Feeds Ltd This company is based in and is registered in Belfast, Northern Ireland. Its business is the manufacture and distribution of animal feeding stuffs, ‘with particular focus on improving customers’ returns through product development and innovation’. Its activities are described as the manufacture of prepared feeds for farm animals and the wholesale of grain, unmanufactured tobacco, seeds and animal feeds. In its latest Report and Accounts covering the twelve months ending in 31 March 2020 and issued on 22 December 2020, the company stated that it ‘continued to invest to improve its competitiveness’ and the Directors looked forward to an improvement in performance in the year ahead. The results for the year were ‘adversely affected’ by what the


company described as ‘the early onset of Spring’ which reduced demand for animal feedstuffs compared to the previous year. At the time of writing the Report, the position on Brexit was ‘uncertain’. These observations reflected the fact that, in the year under


review, the company’s revenues fell by £4.48 million to £51.55 million, a decline of 8 per cent. Gross Profits declined by 6.5 per cent, reflecting a smaller fall in outgoings of raw material costs compared to the decline in revenues. When a markedly smaller decline in indirect costs is taken into account, the company’s Operating Profit fell from £2.11 million to £1.07 million, a fall of over a million pounds equivalent to almost half of the company’s previous operating profit. When other costs such as interest charges are taken into account, the company’s pre-tax profits, at just over a million pounds were £1.04 million or 50.9 per cent lower than in the preceding twelve months. The company’s Gross Profit ratio in the year under review, at 5.3


per cent, was at a fourteen-year low, illustrating the pressure on raw material costs of many company’s during 2020 relative to competitive pressures in the marketplace. The ratio of pre-tax profits on ordinary activities before taxation, at 36.7 per cent, was at a ten-year low. The company’s ultimate parent undertaking and controlling party


is the Dale Farm Cooperative Ltd, a cooperative society registered in Northern Ireland. Its immediate parent undertaking is Dale Farm Cooperative Ltd, a company incorporated in Northern Ireland.


Lallemand Animal Nutrition UK Ltd The principal activities of this company continue to be the manufacture, sale and commercial development of agricultural products, including forage inoculants, animal feed additives and ‘environmental remediation’. The Directors reported, in the company’s annual report and


accounts for the twelve months ending 31 January 2020, that the business had performed ‘satisfactorily’. This was particularly the case as regards the range of products designed to reduce antibiotic use for salmonella control. The company reported revenues of £24.13 million in the twelve


months under review, approximately £1.3 million ahead of the previous year’s outcome. The cost of sales – direct costs – rose by £1.58 million while increased administrative expenses played a role in reducing operating profits from £5.36 million to £4.55 million. Largely as a result, pre-tax profits, at £4.58 million, were down by £786,000 or 14.6 per cent compared with the preceding financial year’s outcome. The company is a subsidiary undertaking of Lallemand UK Ltd.


The ultimate controlling party is Lallemand Incorporated, a company incorporated in Canada and it is this latter company which the Directors regard as the holding company and controlling party.


Comment section is sponsored by Compound Feed Engineering Ltd www.cfegroup.com


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