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Independent.ie

Thursday 8 December 2016

Arrow bounces back to profit

Gordon Deegan

Published 02/12/2015 | 02:30

Horsemeat was mislabelled as beef in 2013.
Horsemeat was mislabelled as beef in 2013.

One of the largest food processors in the country, the Arrow Group, last year bounced back from the impacts of the horsemeat scandal to record pre-tax profits of €19m.

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New figures show that Arrow Group Ltd's pre-tax profits of €19m followed pre-tax losses of €11.27m in 2013 - a positive swing of €30.27m.

The group, which employs over 1,590 people and is owned by brothers Peter, John and Michael Queally, enjoyed the return to profit after revenues increased by 6pc - going from €432.4m to €446m.

In 2013, certain group subsidiaries were impacted by the European beef mislabelling issue which significantly reduced demand and price for some of the group's beef products and frozen ready meals

One of the firm's subsidiaries, QK Meats apologised in May 2013 for its handing of the horsemeat scandal.

In a report, the Department of Agriculture strongly criticised QK Meats on how horsemeat got into Irish-made meat products, pointing out that QK knew it had equine DNA in some products imported from Poland from June 2012, but did not tell the authorities until later.

The company stated it never knowingly incorporated horsemeat into any of its beef products and pointed out no material that tested positive for equine DNA was allowed into the food chain.

Agriculture Minister Simon Coveney confirmed that QK Meats had broken no laws.

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Outlining the return to profit in 2014, the directors' report for the Arrow Group attached to the accounts states that "2014 was a much improved year following a difficult 2013".

Stability

The directors state "group turnover and profitability increased due to a number of factors. The group benefited from improved customer sentiment and demand, greater stability in input prices and continued cost control."

The directors also pointed out that 2013 "included costs relating to the decision to cease part of the group's operations and losses caused by the European beef mislabelling issue".

On the future development of the firm, the directors state that the group is continuing to focus on the control of costs, working capital optimisation and on broadening base.

Staff costs at the group last year increased from €60.2m to €61.4. Numbers employed at the group decreased from 1,603 to 1,593.

Remuneration for directors, including pension contributions last year increased from €261,595 to €292,341. The profit last year includes combined non-cash depreciation and amortisation costs of €12.1m and impairment costs of €320,726

The group's accumulated profits last year stood at €80.5m. The group's R&D spend last year totalled €9.27m.

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