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Supplier of meat industry pays out its first dividend

MEAT industry supplier JR Dalziel has lifted profits and paid out its first dividend to shareholders in its latest financial year, accounts the firm will shortly file at Companies House will show.

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 £15 million increase in turnover to £145 million.

The performance allowed Dalziel to return a dividend of £5 million to shareholders, the first paid by the company.

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.

Chairman Ian Darroch said the rise in turnover had been driven by two acquisitions, and the continued expansion of its frozen and chilled meat division.

The period saw JR Dalziel acquire Rillatec, a specialist food packaging business, and AW Smith, which supplies sundries such as coats, hats and knives to butchers. Both were based in England. The deals took the number of acquisitions it has made to six since its management buyout in 2008.

Noting that the company has taken over more than 50 businesses since 1986, Mr Darroch said the company will "continually review acquisition opportunities".

He said: "If there are good synergies we will press on with acquisitions."

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 provides 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 ingredients, packaging and butchery equipment.

It does not sell directly to supermarkets, but Mr Darroch said its products do reach the mulitples via the processing trade.

The company, which operates 12 distribution centres around the UK, plans to invest more than £3 million in extending and upgrade its premises in Gateshead, Hebburn, Stockport, Hull and Nottingham. The project in Stockport will involve the relocation to bigger premises.

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 said the business had benefited from last year's horsemeat scandal as consumers chose to buy British meat and 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, with the highest paid receiving £211,543. That excludes pension contributions.

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