FOR FARMERS has said it is growing its market share in the UK’s poultrymeat and egg sector in a trading update for the first half of this year.
Revenues in the UK division of the Dutch-based business were up 5.3% in the six months to €338m, but gross profit slipped from €63.6m to €60.8m.
Total feed (which accounts for all products in For Farmers’ portfolio) sold in the UK dropped from 1.44m t to 1.39m t, when compared with the year before.
In its UK trading update, the firm said demand for feed had dropped compared with last year as more forage remained available to dairy producers after a milder winter.
Consumer demand for pigmeat remained stable, but chicken and eggs both experienced continued growth.
For Farmers said the decline in profitability was down to unfavourable raw material prices, which were not passed on to its own customers “for competitive reasons”.
“The resulting effect could only be partly compensated by the margin improvement arising from the tighter commercial proposition in the pig sector initiated during 2018,” the report said.
Overall revenues within the business grew 11.6% to €1.24bn, which includes an impact from acquisitions of +8.7%.
Gross profit was 1.7% lower at €214.1m. But like-for-like gross profits wer 8.6% lower “mainly because of the unfavourable purchasing position that was not passed on to customers (in the Netherlands, Belgium and the United Kingdom)”.
Underlying total operating expenses were 11.4% higher, and underlying operating profit fell almost 60% to €16m.
For Farmers chief executive, Yoram
“The acquisitions, which we made in the second-half of 2018, made a positive contribution but this was not enough to offset the negative effects of the volume decline and the unfavourable purchasing position which we experienced in the first half of the year.”
Mr Knoop also said that environmental restrictions on pig and poultry production in Germany and the Netherlands were another factor restricting growth.
