Animal feed and farm firm Origin Enterprises pre-tax profits fell by 25.7% to €65.5m in the 12 months to 31 July, as the business was hit by brace of bad weather and weak on-farm incomes.
The business has manufacturing and distribution plants in Ireland, the UK, Poland, Ukraine and Romania. Underlying profits for its central European operations increased by 12.2%, although this was marred by a 3.2% decline in the more competitive UK and Ireland.
Weaker returns from beef and dairy enterprises dented Origin’s animal feed division which reported a stagnation in sales. Origin, which owns 50% of John Thompson & Sons Limited, the largest single site multispecies animal feed mill in the EU, said feed performance was “satisfactory”.
Origin’s results in brief
- Group revenue: €1.5bn (up 4.3%)
- Pre-tax profits: €65.5m (down 25.7%)
- Earnings per share: 44.51 cent (down 25.9%)
“Origin Enterprises has delivered a solid operational and financial performance against the backdrop of a challenging planning and operating environment for primary food producers in 2016,” said Tom O’Mahoney, Origin’s CEO in a statement.
“Highly adverse and unseasonal weather conditions, combined with weak farm sentiment, drove a highly competitive trading environment which negatively impacted the Group’s profitability and returns.
"Overall performance has benefited from an excellent result from the Group’s Central and Eastern European farm services businesses acquired in 2016, together with maintaining a group wide operational focus on strategic cost control, business integration and cash flow management. This focus will continue in 2017.”
The business set up its Agrii Polska division in 2016, after the merger of Poland’s Dalgety and Kazgod Group in 2016 – both of which Organ acquired this year. The newly-formed company has the capabilities to be a market leader in Poland, according to Origin.
The company also intends to take over other companies in Europe’s animal feed and crop management space in the forthcoming years.
“We remain committed to expanding Origin’s footprint and will continue to prioritise investment in strategic acquisitions,” said O’Mahoney. He added Orgin’s results were in-line with expectations and said the company was “well positioned” to enjoy the benefits of long-term cash generation.