Bernard Matthews Holdings Ltd has published its results for the 12 months ended 1 July 2012.

In 2011, the Board decided to change the financial year end of the Group, due to the highly seasonal nature of the business. Moving the year end away from its key season to the end of June enables the Group to plan and budget more effectively having the benefit of the knowledge of the most recent Christmas performance. In light of this change, the results for the year ended 1 July 2012 are not directly comparable with the previously reported 18 month period ended 3 July 2011.

Key points

Group sales from continuing operations were £341.4 million (18 months to 3 July 2011: £470.8 million), while operating profit from continuing operations before exceptional items of £5.3 million (18 months to 3 July 2011: £6.6 million loss).

Profit before tax for the year was £2.0 million after exceptional charges of £nil (18 months to 3 July 2011: £28.8 million loss after exceptional charges of £17.5 million).

Turkey consumption has increased 4.4 per cent in the UK (Source: DEFRA, ONS).

The Group has successfully renewed UK banking facilities to December 2015.

The results represent a solid start to the new financial year, according to the press release, but the outlook remains cautious in a testing economic environment. Trading conditions continue to be challenging with high levels of commodity inflation, particularly in respect of feed prices, and continued weak consumer spending.

CEO's comments

Bernard Matthews' Group Chief Executive, Noel Bartram, commented: "Whilst performance in the last financial year has been encouraging, there is still significant progress to be made. We have continued to incur unprecedented feed cost increases and do not envisage such increases abating over the coming year. With consumer spending and the wider economy remaining weak, we are cautious on our outlook for the next 12 months.

"Nonetheless, we remain focused on our strategic objective of doubling turkey consumption in the UK by 2020 and are encouraged by the 4.4 per cent growth over the last year. I believe this to be a reflection of our continued efforts to promote turkey as a healthy and affordable meat."

Operational review

Over the 12 months under review, the Group's performance was encouraging following a difficult prior period. Turkey consumption increased 4.4 per cent in the UK, which the Board believes is a reflection of the UK business' continued focus on championing turkey as a healthy and affordable meat. Bernard Matthews advocates greater turkey consumption generally, whether that is through the Bernard Matthews brand, retail customers' own-label products or food-service.

Turkey is a meat that is both high in protein and low in saturated fat when compared with any other mainstream meats. With consumption of turkey per head in the UK, still one-third of that in the US and less than half of that in France, Germany and Italy, there remains significant potential for growth. In addition, turkey generally is great value for money so remains an ideal choice for the cost-conscious consumer in the current economic climate. As such, the business is confident it is on course to achieve its strategic vision of doubling turkey consumption in the UK by 2020.

Bernard Matthews Oldenburg, the Group's German subsidiary, had a difficult year due to a number of external factors, including the poor summer weather which adversely impacted barbeque sales, and rising raw material costs. Similarly, SáGa Foods, the Hungarian subsidiary, experienced increased input costs allied to relatively weak commodity meat pricing, and the continuing difficulties in the Hungarian economy.

Financial review

Group sales from continuing operations for the 12 months to 1 July 2012 were £341.4 million (18 months to 3 July 2011: £470.8 million) generating an operating profit in respect of continuing operations of £5.3 million before exceptional costs (18 months to 3 July 2011: £6.6 million loss). The profit for the financial period was £2.0 million after exceptional charges of £nil (18 months to 3 July 2011: £28.8 million loss after exceptional charges of £17.5 million).

The Group generated an operating cashflow of £11.1 million (18 months to 3 July 2011: £17.1 million) and a net cash inflow before financing of £3.0 million (18 months to 3 July 2011: outflow of £5.1 million) during the 12-month period to 1 July 2012. The Directors regard this as a satisfactory performance with the Group continuing to be cash positive on a trading basis.

Subsequent to the year-end, the existing UK banking facility was renewed through to December 2015 with the Group's current bankers.

Current trading

The Group is clear on its strategic direction and confident in its plans for the future. Whilst it has a strong order book ahead of Christmas 2012, trading since the period end remains challenging. There continues to be a marked shift in the macro-economic climate with a significant slow-down in both the UK and Europe. The Group is cautious on its outlook for the current financial year when the full effect of the feed cost increases will be felt.