Peter Gradon Meat And Poultry Marketing Limited

The directors have pleasure in presenting the strategic report of the company for the 53-week period from 03 November 2024 to 01 November 2025. PRINCIPAL ACTIVITIES AND BUSINESS REVIEW The principal activity of the company during the year was the processing of meat and poultry products. SALES AND PROFITABILITY Turnover has increased this year to £11,443,217 from £9,755,143 an increase of 17.3%. However, high fuel and energy prices have given higher operating expenses and increased distribution costs. Labour costs have also increased. As a result the gross profit percentage has decreased from 14.6% to 13.7%. We continue to feel the effects of increased fuel costs and other distribution expenses which increased by 10.2% from £646,264 to £712,100. However, distribution costs are linked to turnover and as a percentage of turnover have decreased from 6.6% to 6.2%. The increase in minimum wages and National Insurance has made a significant impact on costs. The earning threshold also reduced from £9,100 to £5,000, creating additional payroll expense. The increased costs are likely to continue in 2025/26 as the current economic climate continues to be challenging. Administration expenses have increased due to price increases. The cost of lighting, refrigeration and heating, increase in minimum wage and National Insurance are contributing factors. We continue to pass some of these increased costs on to our customers. As customers face their own pressures it results in added pressure on the business as it prompts greater demand on discounts and promotions and customer price comparisons. Administration expenses in 2024 were reduced by the reversal of pension contribution of £420,000 and the gain on valuation of investment properties of £350,000. Without these one off adjustments, administration expenses have increased from £582,798 to £664,378, an increase of 14% which is due mainly to a bad debt being suffered in the year of £52,239. The increase in administrative costs is expected to continue due to ongoing cost pressures, particularly in relation to fuel, refrigeration, labour, and utilities. The turnover in the current year is expected to return to in excess of £11,000,000, partially through price increases and partially through additional product. The valuation of investment property is unchanged during the period at £1,980,000. BALANCE SHEET AND LIQUIDITY The company has a strong balance sheet with net asset of £10,018,604, (2024 - £9,731,246.) the current liquidity ratio showing a healthy 6.5%. (2024 - 6.2%) At the year-end, the company was owed £3,402,946, (2024 - £4,102,365.), by Gradon Estates Limited, a related property investment company. After year end, the debt was assigned to Peter Gradon Investment Holdings Ltd as part of the demerger. FUTURE DEVELOPMENTS We are pleased to report that sales are continuing to recover with projected turnover remaining in the region of £11,500,000 and gross profit margins continuing at a similar level. The business will continue to balance customer retention and competitiveness whilst managing substantial cost inflation across multiple areas of operation. Continuing to improve efficiency, recover costs through selective price increases, strong debt management and focus on higher-margin sales opportunities will be critical objectives throughout the forthcoming year. PRINCIPAL RISKS AND UNCERTAINTIES The Directors continually monitor the risks to the company and take action to minimise the risks as much as possible. The Directors operate strict internal controls to ensure all hygiene compliance procedures are adhered to. Costs and supply pressures are a key focus, especially in the volatility of the currency markets when trading within the EU and bringing goods into the country. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES Trade debtors and trade creditors, which arise directly from its operations. The main financial risk facing the company is customer credit risk, which is managed through credit control policies and procedures. Price risk, cash flow risk and liquidity risk have also been and will continued to be managed in a controlled manner reducing the overall exposure of the company to a minimum.