MEAT industry supplier JR Dalziel has hailed the benefits of its continuing acquisition strategy as it lifted profits and paid out its first dividend in its latest financial year.
The Lanarkshire-based company, which supplies the meat processing and retail butchery trades, saw pre-tax profits increase by £800,000 to £9.8 million for the year ended September 27, driven by a £15m increase in turnover to £145 million.
The sales rise was driven by the expansion of the firm's frozen and chilled meat division, and by two acquisitions in England.
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The deals took the number of takeovers it has completed to six since its management buyout in 2008, and 50 since 1986.
JR Dalziel acquired Rillatec, a specialist food packaging business, and AW Smith, which supplies sundries such as coats, hats and knives to butchers, in the period covered by its latest accounts.
Chairman Ian Darroch said the company would "continually review acquisition opportunities", and stated: "If there are good synergies we will press on with acquisitions."
The company's performance last year allowed Dalziel to return a £5m dividend to shareholders.
But while it intends to pay future dividends, the firm said its priority this year will be to invest in its factory and warehouse network.
The company, which has 12 distribution centres around the UK, plans to invest about £3 million in extending and upgrading its premises in Gateshead, Hebburn, Stockport, Hull and Nottingham.
It will relocate to bigger premises in Stockport.
Mr Darroch said: "Although we are not totally averse to borrowing for investment or acquisition as the opportunities arise, we do have a determination to continue funding from our own resources and, therefore, future dividend payments will have to wait until cash reserves permit."
Mr Darroch cited the strength of the management team as it saw the continued expansion of its chilled and frozen meat business "in all of our territories".
The division sells top-up supplies of boxed meats to a customer base of around 8,000 butchers, driving about £50 million in turnover.
Dalziel generates the remainder of its turnover from the sale of ingredients, packaging and butchery equipment.
It does not sell directly to supermarkets, but Mr Darroch said its products do reach the multiples via the processing trade.
Mr Darroch said the business had benefited from last year's horsemeat scandal as consumers chose to buy British meat, and he hopes the trend will continue.
Mr Darroch confirmed that JR Dalziel employs 70 of its approximately 500 staff in Lanarkshire. The accounts show that staff costs rose to £14.5 million last year, up from £13.2m the year before.
Directors' remuneration rose to £603,362 from £551,642. The highest paid received £211,543, excluding pension contributions.