Pretax profits tumble at poultry giant Manor Foods

Pretax profits at the company behind Manor Farm, the largest chicken processor in the State, fell by 90 per cent in 2021, as inflation, Covid-19 and avian flu bit in the latter half of the year.

A notable increase in costs — particularly related to soaring chicken feed and energy prices — contributed to last year’s drop-off, according to new accounts filed by Carton Bros Unlimited, which was sold for €70 million in 2017 to Swedish group Scandi Standard by brothers Vincent and Justin Carton.

Pretax profits at Carton Bros fell to just under €1.7 million in 2021 from €17.8 million in 2020 when the company was able to pay a €20 million dividend to shareholders.

Turnover at Carton Bros declined by €7.3 million last year, from more than €200 million in 2020 to just under €194 million while its sales costs climbed by more than €5.3 million to €177 million in 2021. Operating expenses at the business, which include its distribution and administrative costs, also jumped €3.1 million.

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Soaring input costs were mostly to blame for the performance, the accounts noted. “Cost increases became exacerbated towards year-end and into the new year, particularly feed and power as well as wage demands,” it said in the accounts.

The price of animal feed, which is mostly made with grains such as wheat, skyrocketed across the board last year due to booming demand for cereals, global supply chain bottlenecks and sharply inclining energy costs. Prices were expected to increase again this year even before the Russian invasion of Ukraine, which threatens to choke off supplies of grain and cereal from the Black Sea region to the world market.

The pandemic also continued to have an impact on production in 2021, the company noted in the accounts, giving rise to “disruption and additional costs in the business and to its customers”. Production activity had to be “scaled back” towards the end of 2021, “impacting sales”, according to the filing.

Production was also disrupted, according to the accounts, by an outbreak of avian flu in November and December of 2021 near the plant in Shercock, Co Cavan. “Although none of Manor Farm’s suppliers were impacted, it did cause disruption and limitations around production and export volumes for a period of time,” according to the accounts.

Carton Bros employed an average of 948 people in 2021, the vast majority of them in production, down from 1,019 the previous year.

After the 2017 sale, Vincent Carton stayed on as country manager at the Manor Farm until 2019 when it was announced that he would leave the role. The most recent accounts for the Irish entity show that he resigned from the board altogether in October 2021. It is understood that there are now no Carton family members involved with the business.

Last year, a Carton family-controlled company divested six million shares in Scandi Standard, generating about €36 million, according to a filing by the Swedish company with the Stockholm Stock Exchange.