CORK Co operative Marts has decided not to pay any dividend to its 15,000 members for 1996 after a fall in profits. Instead, the board of the farmers co operative is setting up a special reorganisation fund to provide for the consolidation of the business.
After weak results, with pretax profits down by 10 per cent to £410,000, the coop board has decided to transfer £125,000 out of 1996 retained profit to a newly created reorganisation reserve. This fund is expected to "form the foundation" for meeting anticipated future costs of consolidation and reorganisation.
Any reorganisation of the business will involve costs, the chairman, Mr Tom Meaney, told shareholders in the annual report. The new fund will form the foundation for meeting such costs he said.
Explaining the decision not to pay a dividend, he said the board gave "long and careful consideration to the issue of the allocation of the 1996 surplus" but that "mindful of future commitments", a dividend could not be recommended.
Cork Marts has nine sales centres - located in Bandon, Fermoy, Middleton, Skibbereen, Millstreet, Dungarvan, Macroom Mitchelstown and Cahir - where it holds cattle, sheep and pig sales. Asked if the reorganisation could mean the closure of some sales centre, Mr O'Sullivan stressed that nothing had been decided. But, he said, changes could be influenced by the volume of business in each area of the group.
Weaker cattle prices and lower numbers for sale depressed profits in 1996. Pre tax profits fell by 10 per cent but the underlying fall was greater because the 1996 outcome was helped by a once off £125,000 final distribution from Irish Meat Producers after the completion of its receivership.
When the affect of the once off payment from IMP and the share of losses was stripped out, co-op underlying profits were 42 per cent weaker at £289,000. Operating income slipped 10 per cent to £2,545,000. After a lower effective tax charge profits after tax fell to £318,000 from £322,000. After the transfer of £125,000 to the new reorganisation reserve, Cork Marts had retained profits of £1,231,000 at the end of 1996.
