Dundas Chemical Company (Mosspark) Limited

We aim to present a balanced and comprehensive review of the development and performance of the group during the year and its position at the year end. Our review is consistent with the size and nature of the group and is written in the context of the risks and uncertainties we face. Principal activity Dundas Chemical Company (Mosspark) Limited is a wholly owned subsidiary of Lincoln Protein Holdings Ltd. Its revenue is derived from the removal and processing of abattoir and food industry by products; as well as on farm fallen stock throughout the United Kingdom, producing a wide range of proteins, fats and oils which are used in the oleochemical, fuel and feed industries. Business review The company has reported a reduction in revenue to £29,270,210 (2023 - £38,598,281). Operating loss amounted to £2,078,671 (2023 - £5,501,709). The results continue to reflect a combination of high energy price costs derived from the ongoing Ukraine conflict and global economic instability, as well as the remnants of the legislation changes in Asia in August 2023 where overseas market for MBM ceased. During the period the company received dividends from a subsidiary of £2,000,000 (2023 - £nil), which despite the losses for the year, enabled shareholder's funds to increase to £1,737,853 (2023 - £1,345,920 as restated). Capital expenditure during the period was £293,175 reflecting ongoing investment in increasing capacity and attempt to improve performance. After the company came under the full control of the Lincoln Protein Holdings Ltd Group in July 2024, the directors adopted the accounting policies of the Group which included changing from the revaluation to the cost model for recognition of Freehold Property. This resulted in a reduction in the shareholder funds at 31 December 2023 of £7,040,575. The company's key performance indicators are production costs per tonne and these principally driven by labour, energy and transport costs relative to throughput. The company's aim is to further build its supply base and improve performance through increased throughput and operational performance. Risk management policies The company faces a number of risks and the directors continue to mitigate these as far as possible. A summary of the key risks are as follows. Interest rate risk The company's exposure to market risk for the changes in interest rates relates primarily to its bank and finance lease borrowings. The company seeks to manage this risk by the use of a combination of variable and fixed rates. Liquidity risk The company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. Short-term flexibility is achieved by overdraft facilities. Inflation risk The company is exposed to the impact of inflation on its costs and every effort is made to mitigate this. Nevertheless with these risks and uncertainties in mind, we are aware that any plans for the future development of the business may be subject to unforeseen future events outside of our control. Future developments The same pressures are still present into 2025 however, with the successful change in ownership that completed in July 2024, and the synergies this brings being part of a larger group we expect to see increased performance in the coming years.