March 31, 2011

 

Cappoquin Poultry decreases production

 

 

As chicken feed costs increase by 55%, one of Ireland's largest chicken producers, Cappoquin Poultry, has temporarily decided to decrease production by 25%.

 

Co-owner of Cappoquin Poultry, Tom Vaughan, confirmed the move yesterday (Mar 30) when commenting on accounts filed by the Co Waterford firm showing it recorded a pre-tax profit of almost EUR300,000 (US$424769) in its first full 14 months of operating after rescuing almost 200 jobs at Cappoquin Chickens.

 

In accounts filed to the Companies Office by Cappoquin Poultry (Holdings) Ltd and subsidiary recently, the company recorded a pre-tax profit of EUR295,846 (US$418888) from October 3, 2008, to December 31, 2009.

 

Cappoquin Chickens went into liquidation in 2008 and was rescued by Perwaiz Latif, Zahid Hussain and Vaughan. Prior to the buying, 200 jobs were in doubt and the accounts showed Cappoquin Poultry employing 174 workers at end December 2009. There are currently 165 employees.

 

Vaughan said, "The first-period results were satisfactory".

 

The firm's facility can process 500,000 units per week. However, he said some staff are now on a three-day week as due to the cut in production. "This will be reversed when production is increased.

 

"Chicken food costs have increased by 55% per bird which we have not been able to recover in the market. This food cost increase has occurred in the latter half of 2010 and into 2011."

 

"This has a major impact on margins and will impact on the results. The company has temporarily cut back by 25% in production, but plans to reverse this cut in the second half of 2011 when it anticipates chicken food prices to fall after the harvest."

 

The figures for the new firm, Cappoquin Poultry, show it had revenues of EUR31.1 million (US$44 million) in its first 15 months.
 

The company's cost of sales, along with staff costs of EUR4.3 million (US$6 million) and other overhead expenses at EUR3.75 million (US$5.3 million), resulted in the company having a group operating profit of EUR234,834 (US$332501).

 

The figures show that interest income boosted the group's earnings by EUR198,000 (US$280348) with interest payable and other charges of EUR136,968 (US$193932) resulting in the pre-tax profit of EUR295,846 (US$418888).