CHERRY VALLEY FARMS added £7m to its top-line sales in 2018 and added almost £10m to its pre-tax profits.
The duck genetics business, which operates in the UK, Europe and China, posted sales of £23.1m and pre-tax profits of £13.9m – up 175% and 215% respectively, in the year to 31 December 2018.
The company said the main drivers for improved profitability were a European business unaffected by avian influenza and improved trading conditions in China.
“Sales were very strong in 2018 as exports outside the EU had not been possible for much of 2017, which had increased demand. With no AI restrictions affecting 2018 at any point, it was possible to meet that high demand.”
It adds that the business has relatively high fixed costs, which can have a significant impact on profitability when turnover falls. “Conversely, with much higher sales volumes this year, the level of costs has not increased in line with the higher volume, leading to improved margins.”
The directors’ report also says that it is looking to expand its business in Vietnam with the creation of a new subsidiary breeding operation. As of the end of last year, that company was not yet operating.
Within Europe, the report says that negotiations are underway within the wider poultry breeding industry to introduce a region-by-region assessment for health certificates. That could negate the impact of avian influenza, providing the outbreak was a distance from the group’s production facilities.