Company Reports & Accounts


By Roger Dean


Dugdale Nutrition Ltd On 1 May 2018, the operations of B. Tickle & Sons were fully integrated into Dugdale Nutrition Ltd, formerly known as B. Dugdale & Son Ltd. The company submitted its full annual accounts made up to 30 April 2018 on 18 January 2019. The company noted that the year under review was marked by


‘several major events in the company’s 168-year history’. These, combined with the severe weather characterised as the Beast from the East, meant that total output reached 200,000 tonnes. The company went on to note that ‘this period of excessive demand also coincided with a rapidly rising raw material market which caused margin erosion in the second half of the trading year’. Turnover in the twelve months under review amounted to £51.71


million, an increase of £12.84 million or a third compared to the preceding year. The cost of sales also increased, by £11.82 million or a shade less than 36 per cent. As a result, the gross profit ratio fell from 15.4 per cent in the preceding year to 13.6 per cent during the year under review; the latter was the company’s worst Gross Profit ratio in the eleven years since it started to submit full accounts. Taking distribution and administrative costs into account saw the company’s Operating Profit ratio fall from 1.2 per cent in the preceding year to 0.8 per cent in the year under review, substantially below the average of the preceding ten years. The decline in the pre-tax profit ratio was corresponding eroded, from 1.2 per cent in the preceding year to 0.8 per cent in the year under review. Data for the company’s return on capital employed shows the return at 20.3 per cent in both the preceding year and the year under review.


J.E. Porter This company submitted its Report and Accounts for the year ending 31 March 2018 on 19 December 2018. The company’s business is described primarily as the manufacture of prepared feeds for farm animals (SIC Code 10910). The company’s directors noted that the business environment


in which the company operated continued to be challenging due to a number of market conditions. Observing that the company’s customers faced pressure on prices from the major supermarkets in addition to competition from overseas imports, meant that ‘it is difficult to pass on increases in our costs of production to our customers’. The company turned over £64.82 million during the twelve months


under review, an increase of £6.45 million or 11.1 per cent over the previous accounting year. However, the company incurred increased costs of sales amounting to $7.42 million, 13.8 per cent greater than in the previous accounting period, illustrating the difficulty experienced by many feed manufacturers in passing on higher raw material costs to


their customers. As a result, the company’s Gross Margin declined by £0.95 million and the Gross Margin percentage fell from 8.1 per cent in the previous accounting period to 5.8 per cent in the twelve months under review, the lowest in five years. The company appears to have had a degree of success in


adjusting its indirect costs which, at £1.49 million during the previous accounting period, fell to £1.27 million in the twelve months under review, a reduction of £224,000 or 15.1 per cent. However, principally as a result of higher direct costs, the company’s operating profit fell from £3.22 million in the previous accounting period to £2.49 million, a reduction of £724,000 or 22.5 per cent. When residual factors, such as income from fixed asset investment and interest payments are taken into account, profits before taxation fell by £840,000 or 24.5 per cent. The pre-tax profit ratio fell from 5.9 per cent to 4 per cent in the year under review, a further five year low.


Burgess Group Plc The latest accounts for this group of companies was made up to the year ending 31 May 2018. The Group’s principal activities are described as ‘the manufacture of prepared pet foods, the development of building projects and the renting and leasing of other machinery, equipment and tangible goods not elsewhere classified’. There are substantial changes post-balance sheet that affect the


structure of the company. On 2 July 2018, the company was involved in a capital demerger transaction. As a result, the company, with its remaining net assets, including the pet food manufacturing division, became a wholly owned subsidiary of a new dormant holding company, Burgess Group Holdings Limited. As this change in structure occurred post-balance sheet, it will not materially affect developments subsequent to 31 May 2018. For the year under review, the Burgess Group reported sales


of £20.65 million, £0.98 million or 5 per cent ahead of the previous accounting year. However, there was a very sharp increase in direct cost of sales. These increased by £1.36 million or 12.6 per cent. It is not clear how much of this was attributable to the petfood manufacturing operation but the sharp increase in direct manufacturing costs is consistent with reported trends in other feed manufacturing companies. The Burgess Group’s Gross Margin ratio fell from 45.1 per cent to 41.1 per cent, the lowest in five years, as a result, in common with many other companies, of its inability to recover rising raw material costs. There was also a sharp increase in indirect costs, from £7.05


million in the previous reporting year to £8.53 million during the year under review, an increase of almost twenty-one per cent. There is no obvious explanation for this increase. However, the combination of both higher direct and indirect costs resulted in a sharp decrease in the Group’s operating profitability, from £1.81 million to an operating loss of £37,000 in the year under review. The company received £211,660 in the form of income from current asset investments and a further £6,371 in interest receivable from loans and deposits, resulting in a pre-tax profit of £181,479, compared to a pre-tax profit of approximately £2.04 million in the previous accounting year. This resulted in a pre-tax profit ratio of 0.9. the worst, with the exception of the 2016 accounting year, since 2008 and indicative of the pressures faced in 2018.


FEED COMPOUNDER MARCH/APRIL 2019 PAGE 19


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