Read the 2018 Annual Report here.
Releasing its 2018 Annual Report, the report highlights the company’s improved position on 2017, pointing to more chilled sales, a better yield from each carcass and an increase in rendering returns as the carriers of a successful year.
Ending the 2018 financial year with a net profit before tax of $3.7 million, and total revenue coming to $105 million, this has resulted in shareholders being paid a dividend of 5c per share.
This total revenue is a 7% increase on last year, driven by Blue Sky Meats’ Strategic Plan and favourable market conditions, and rendering income was the highest it has been in five years, with income per unit up 80% and volume up 50% on last year.
Blue Sky Meats CEO Todd Grave was delighted with the company’s performance over the past year.
“When you see a result like this, it really helps to bolster confidence and shows what a small Southland company can accomplish,” he said.
“A big thanks to our farmer-suppliers who have stuck with us, even in some tough conditions, and who continue to give us great feedback about the ease of working with us.”
Now 18 months in to the three-year implementation of the company’s Strategic Plan, with a focus on maximising the value from each carcass, this has generated $6.9 million of additional value which has been achieved with minimal additional operating expense and capital investment.
“It’s the people at Blue Sky who have made this possible and I want to thank everyone for their hard work – they’ve understood why the changes have been made and embraced the plan fully.”
Despite the consolidated position, Grave was wary of celebration and emphasised there was a lot of work ahead.
“We know we’ve worked really hard to be in this position, made a lot of changes – some of which have not been easy at times – but it shows in where the company is today, compared to last year,” he said.
“One positive year is never an indicator on how the coming year will go and, going forward, we’re concentrating on increasing our profitability and resilience.”
Blue Sky Meats would look to concentrate on building a business that can deliver further increases in profitability and be more resilient to external factors (such as commodity cycles and weather patterns).
After a review during the year of the company’s Gore plant, the decision has been made to sell the plant.
This decision was not made lightly but with the plant being non-operational since late 2016 and a focus on investment in the Morton Mains plant, the board felt this was the best course of action for the ongoing financial performance of the company.
Chairman Scott O’Donnell was pleased with the company’s result and said the next step would be to create a value added, differentiated brand position to further increase profitability. This would include a focus on investing in plant infrastructure to reduce the company’s environmental impact.
“We already know that being southern New Zealand, our pastures are farmed with care and integrity by our suppliers, but due to the increasing nature of agriculture in New Zealand in general, there’s a lot of pressure on our environment,” he said.
“As a nation and as an industry, we need to be looking at ways of taking pressure off the environment while still making sure we’re continuing to be profitable and achieving better returns.”
Blue Sky Meats’ Annual General Meeting will be held on August 2 at Bill Richardson Transport World in Invercargill.