Tulip experienced its fourth year of consecutive loss, despite a decrease in operating loss for the year – down from £37.6m to £17.3m. This was mainly attributed to a rise in administrative expenses for the year, up 58.1% to £54.1m.
In response to the sustained losses experienced by the company, the board of directors has developed a turnaround plan with “a number of strategic initiatives to return the company to profitability, covering sales, operational efficiencies and cost reduction measures”.
“The company has also continued to invest in plant and machinery to improve the effectiveness of the business,” the statement continued. “The directors remain confident about the prospects for the business going forward.”
While sales for the business were principally within the UK (£1bn), turnover for the year edged above the previously reported period thanks to a growth in sales to other European countries – up from £42.9m in 2018 to £60.9m in 2019. However, the cost of sales grew to £1bn from £994.5m.
A spokesman for Tulip told Food Manufacture that 2019 was focused on recovery for the business, with the outcome to be truly reflected in the company’s full-year 2020 results.
“We went through quite a tough cost management programme, where we took a significant amount of operating cost out of the business,” said the spokesman. “Efficiency drives that went throughout the organisation.
“Having started the financial year in a position where we were effectively losing around £800,000–£1m a week, we closed the financial year and, during the course of the current financial year, have been consistently been making a profit week-on-week.”
Investing in the future
Despite the exceptional items increasing the meat processor’s losses, work was undertaken by the business to solidify key customer partnerships and invest in production.
“Last year was all about recovery and, this year, having got to a point where we feel the business is now out of recovery, there’s a renewed sense of optimism,” the spokesman added. “This year is all about stabilising the business and growth.”
The results are the first published by Tulip since its acquisition by Pilgrim’s Pride from former owner Danish Crown in the autumn of last year, in a deal worth £290m.
Under the terms of the deal, Danish Crown would continue to supply Danish pork to Tulip under a long-term supply agreement.
Meanwhile, Avara Foods, the joint venture between Cargill and Faccenda, has achieved turnover of £1.1bn in its first year of trading.