SCOTTISH frozen food retailer Farmfoods achieved a leap in profits last year as sales surged amid the economic gloom.
The latest Companies House filing from the family-owned Farmfoods, which advertises its low prices heavily, reveals a 30% increase in pre-tax profits from £13.1 million in 2009 to £17m in 2010. The retailer, of which 84% is owned by Eric Herd, achieved a rise in sales from £484m in 2009 to £579m last year.
Farmfoods declined to comment on the reasons for its strong performance last year, when contacted by The Herald.
But it would seem likely that Farmfoods, which says on its website that it has about 300 stores throughout Great Britain, will by virtue of its value proposition have benefited from the tougher economic times as household budgets come under pressure.
Farmfoods’ owners reaped the benefits of the jump in profits and sales as the company declared a dividend of £6.81m for 2010, double the £3.405m for 2009. Based on shareholdings in Farmfoods’ latest annual return, Eric Herd’s share of the dividend is £5.7m.
George Herd, who was appointed as a director of Farmfoods on May 4 last year, will receive £300,000 on this basis, while fellow director William McCreadie is set to collect £360,000.
Total directors’ pay at Farmfoods rose from £2.31m in 2009 to £2.7m last year.
The emoluments of the highest-paid director increased from £1.02m to £1.14m.
Farmfoods, which originated in Aberdeen in 1955 and is now based at Cumbernauld near Glasgow, is among Scotland’s largest privately owned companies in terms of sales and employee numbers.
There was a big increase in staff numbers last year as Farmfoods enjoyed growth. The Companies House filing obtained by The Herald shows the average weekly number of employees at Farmfoods rose to 2989 last year, from 2798 in 2009.
Farmfoods’ directors revealed in their statement on the accounts that “trading conditions have been and are expected to remain competitive”.
Net borrowings at December 31 amounted to £22.37m, down from £26.8m at the end of 2009. Farmfoods invested £4.95m in freehold property last year, up from £4.61m in 2009.
The Farmfoods directors also highlight the “great importance” they place on energy efficiency, noting the company “consumes significant levels of electricity supplies”. And they note Farmfoods’ efforts to promote the re-use and recycling of packaging materials, including carrier bags.
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