Troubled co-op ‘now fit for the future’

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THE fortunes of crisis-hit North-east farmers’ co-op ANM Group have been transformed in the past year and the company is now back in profit, according to chief executive Pat Machray.

The accounts for the year to 31 December, 2012, released yesterday, show trading losses reduced from £2.5 million in 2011 to £477,000 following the disposal of the company’s loss-making meat processing interests.

One-off exceptional items, including a £3.7m loss from the sale or closure of the company’s meat businesses – a financial hit flagged up in last year’s accounts – and a loss of £2.8m on the revaluation of fixed assets, has pushed up the loss at pre-tax level to £7.1m, against £4.1m last year.

Despite these losses, the balance sheet remains strong with capital and reserves of £20.5m.

Machray, parachuted in a year ago to turn the business round following heavy losses incurred by subsidiary companies Scotch Premier Meat, Yorkshire Premier Meat and Charcuterie Continental, is confident the company is now on the right financial path.

“The group moved into profit in the final quarter of 2012 and while January was difficult, we are still continuing to operate profitably,” said Machray. “The £2m improvement in the trading position is a tribute to the action of the board, management team and staff and is a significant achievement in one year.”

Machray, formerly chief executive of accountants Johnston Carmichael, said he had been brought into to de-risk the business and this had been achieved by selling off the meat businesses. All costs associated with the re-structuring of the business had now been written off.

“The business is now fit for the future and we are confident we will return to profitability in 2013,” he said.

The group has retained a 25 per cent interest in the Yorkshire business, which was the subject of a management buy-out, and a 25 per cent interest in Scotbeef Inverurie, a joint venture with Scotbeef of Bridge of Allan.

The group’s core business as livestock and specialist auctioneers – Aberdeen & Northern Marts – continues to operate profitably, although profits for 2012 fell to £1.354m from £1.677m the previous year which was helped by a £454,000 interest adjustment.

Borrowing has been reduced from £10.6m to £3.25m and has fallen further since the end of the financial year

The board is recommending to the annual meeting on 2 April a dividend of 2.5 per cent which will result in a profit distribution of £109,000. At the meeting, Machray is expected to announce a “master plan” for the development of the groups’ Thainstone site at Inverurie .