Severe market uncertainty casts cloud over outlook for Hall’s saviour Browns
BROWNS Food Group, the company which resurrected the Hall’s of Scotland meat brand, has warned that “severe market uncertainty around European and world macroeconomic conditions” is clouding its outlook for the company’s current financial year.
Sanquhar-based Browns highlighted “extremely competitive” market conditions as it delivered a pre-tax profit of £7.7 million for the year ended December 31, according to accounts newly filed at Companies House.
Browns, which acquired the Hall’s brand from Vion Food Group in 2013, had booked profits of nearly £7m the year before.
Finance director Alan Hill said the company had delivered a “good performance” across turnover and profits, noting that progress had also been made in driving down net debt.
However, he said 2016 is shaping up to be “much slower year”, as the group contends with steep price inflation on materials such as salmon and pork, as well as shifting consumer tastes away from frozen to fresh foods.
Browns is attempting to respond the changing trends by introducing more premium, value-added frozen lines, and becoming more efficient operations.
“We’ve seen price inflation, particularly postBrexit,” Mr Hill said. “We import quite a lot of our materials so we were not only hit by Brexit and the currency move – the realignment across dollars and sterling.
“Salmon jumped about 50 per cent in the last year and we are seeing some European pork prices increase as well. It’s very hard to pass that inflationary pressure on to our customers, albeit we have done reasonably well at that.”
He added: “The whole Brexit and “neverendum” leads to uncertainty.”
According to its latest accounts Browns, which has been owned by the Godfrey family since the late 1980s, in its turnover rose to £169m in 2015 from £151.7m the prior year.
Secretary Susan Godfrey notes in the accounts the company secured a threeyear borrowing facility with Bank of Scotland, its longterm banker, during the last financial year.
The facility is helping to fund a £4m investment in new equipment at the company’s cooked meat manufacturing facility in Kirkconnel, the “mainstay” of the business, which is also being backed by grant funding from the Scottish Government.
Mr Hill said the refinancing with Bank of Scotland has given the company, whose brands include Borders Gourmet and Tarbert Fine Foods, “more flexibility” and the “headroom to continue to invest”.
The latest accounts for Browns show that £159.7m of its £169m turnover was generated in the UK last year. Some £9.1m of sales were generated in the rest of Europe, and £256,000 beyond the continent.
Asked how the Hall’s brand was progressing under the Browns’ aegis, he said new products have been gradually added to the range to include cooked meats as well as sausage and haggis, with listings steadily rising.
“It’s slow growth and good growth,” Mr Hill said. “To transform it overnight... it’s not the way to do it.”
The company increased its average employee headcount to 1,209 last year, having employed an average of 1,149 in 2014.