LOCH Fyne Oysters has signalled an appetite to continue investing in improving its product range and farming networks even though its latest financial accounts showed a £616,822 pre-tax loss.
The Cairndow company, formerly owned by its workers, but now controlled by Scottish Seafood Investments, extended its latest financial reporting period to the 16 months to October 31, 2013 in accounts recently filed at Companies House.
These show revenue from continuing operations of £19.4 million plus a £211,113 contribution from the oyster farmer Seasalter (Walney) which Loch Fyne took a 50 per cent stake in.
Loading article content
Revenue from the UK came in at £14.5 million with £2.6 million from Europe, more than £1.8 million from the Far East and a contribution of £622,281 from the rest of the world. That compares to the £17.05 million brought in from the UK in the 12 months to June 30, 2012, alongside £1.5 million from Europe, £615,529 from the Far East and £380,986 from other markets.
The pre-tax loss for that year was £155,412 although the business made a small operating profit of £36,712 on continuing operations, from a turnover of £12.9 million. The changes in UK revenue are mainly a result of the offloading of the Simson's Fisheries in the prior year and a re-shaping of the supply agreement with Loch Fyne Restaurants, which is owned by Greene King.
Campbell Shirlaw, Loch Fyne Oysters' executive chairman, believes progress is being made and said: "We continue to invest in the business and would hope to be profitable in the year to October."
The accounts state gross margin fell from 16.5 per cent to 15.3 per cent as a result of delays in passing on price increases in smoked salmon, on the back of higher fresh salmon prices.
Loch Fyne said: "A higher market price for smoked salmon has now been established across the customer base and margins for the next financial year are expected to return to prior year levels."
The three-month closure and refurbishment of the company's famous Oyster Bar restaurant also affected margins.
Award-winning seafood chef Roy Brett is overseeing the food operation at the Oyster Bar and typically spends at least one day a week there. Mr Shirlaw said: "The food offering is much better. We still need to do better on consistency and front of house service, but we are getting there."
On the £250,000 spent on the acquisition of the stake in Cumbria-based Seasalter, which trades as Morecambe Bay Oysters, the directors said the move will increase future oyster volumes.
There is also an option for Loch Fyne to acquire the remainder of Seasalter for around £250,000. Mr Shirlaw said: "Clearly the intention would be for that to happen."
After the end of the financial period, Loch Fyne also bought the assets of Hebridean Mussels and Hebridean Seafoods in the Outer Hebrides for £1 million. The directors said that will double Loch Fyne's volume of available mus-sels in the current trading year and increase output in the future.
Mr Shirlaw indicated that the company is talking with several other potential partners as it seeks to grow its supply base in order to meet the growing demand from overseas.
He said: "We are working to increase our partner farms in Scotland in terms of the supply of [oyster] seed and also give them a guaranteed route to market for their product. There are other connections in the pipeline which should increase our volumes significantly, but there is a one or two-year cycle to that, so our sales division needs to plan the markets those will be distributed to.
"We want to work with local people to be virtuous partners rather than big brother. Hebridean Mussels is going well and we hope to more than double our mussel output."
Loch Fyne is also working with Ocado on an online shop-within-a -shop venture which will go live soon.