A programme of redundancies at Northern Ireland-based veterinary pharmaceutical manufacturer Norbrook last year cost the company more than £3.1 million (€3.6 million) after what it described as a “disappointing” financial performance in the year to the end of July.
Pretax profits at the group, a significant employer in the Newry area, fell by around 80 per cent in its last financial year to £3.8 million, according to accounts filed before Christmas.
The business incurred an exceptional charge of more than £3.1 million related to a round of voluntary redundancies announced in June.
At the time, Norbrook, which employed close to 2,000 people last year, said it would look to cut 180 jobs as it explored “ways to minimise the need for compulsory redundancies” amid a “challenging global economic environment”.
In a report attached to the latest accounts, directors said the financial performance was ‘disappointing’. ‘Whilst sales increased,’ they said, ‘they were disappointing versus what we had anticipated’
The group, founded by the late businessman Edward Haughey, paid £6.5 million in dividends to shareholders during the year, the accounts reveal.
In a report attached to the latest accounts, directors said the financial performance was “disappointing”. “Whilst sales increased,” they said, “they were disappointing versus what we had anticipated and, as a result, we took the difficult decision to reduce our headcount.”
Sales grew by 0.4 per cent over the 12-month period, up from 0.2 per cent in the year to the end of June 2022, “lower than anticipated levels”, the directors said. The company took a £2.3 million hit of foreign exchange fluctuations compared to 2022. It also invested around £15 million in upgrading its manufacturing facilities.
Norbrook’s gross margin, meanwhile, shrank from more than 40 per cent to 35 per cent in the year as sales costs swelled by almost 9 per cent to £151.1 million.
However, Norbrook had accumulated profits of more than £153.3 million at the end of July last and the directors said they were confident the business is “well placed” to weather the current climate.
[ Haughey single-handedly forged Norbrook into business empireOpens in new window ]
In particular, they said the group had a “steady pipeline” of new products, having launched six new products in the US last year alone.
The group was founded in 1969 by Mr Haughey, Lord Ballyedmond. He died in a helicopter crash in 2014. The company is now controlled by a family trust, while Mr Haughey’s widow controls a stake of 21 per cent.
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