Horgans hit by losses and forced to reorganise

HORGANS Delicatessen Supplies, the Cork food speciality food maker, swung in to a loss last year after a reorganisation of the business.

Accounts just filed for the Mitchelstown company show that it lost €231,324 in the year to December 27 2003 compared to a profit of €439,189 the previous year.

The company said it had been under pressure from the major retail chains and from a loss of business. The company, which supplies cheeses to main supermarket groups like Tesco and Dunnes, said it has reorganised its business to counter the loss of profits.

“Since 2001 the Irish retail trade has seen significant changes, discounters have now entered the market and some of our key customers have changed or are changing from a direct store delivery to central distribution.

“These changes have really began to impact on our business during 2003 when the discounters became more aggressive in their prices, this resulted in greater competition for our key customers and consequently less sales growth,” the company said in the accounts.

To counter this, it has implemented a number of changes, including the splitting up of its sales and distribution business with a new team of sales representatives focused on regaining lost ground.

It is also changing its distribution system so that customers receive their products sooner.

The company said they “are confident that the measures that they have put in place to counter this year’s adverse trading will have the desired effect of returning the company to profitability”.

The company’s sales fell slightly to €26.4 million, while it booked a €149,000 charge for restructuring costs. The number of people employed at Horgans fell by just one during the year, and its wage bill went up from €3.2m to €3.5m.

Long-term debt fell from €1.6m to €1.5m, while shareholders’ funds fell from €2.75m to €2.56m.

Total directors remuneration, which includes pension contributions increased from €208,546 to €244,898.

The company, founded in 1977, expanded its facilities in Mitchelstown a number of years ago, to cover 3,500 square metres, including a cheese cutting, waxing and packing facility.