1 February, 2006

PELAGIC fish processor Shetland Catch has recorded record profits of £6 million (£8.8 million before taxes) for the financial year ending 31 March 2005.

Figures released by Companies House yesterday (Tuesday) also show that the company increased its turnover by £2.5 million to £75 million pounds in 2004.

The company is owned by Shetland's pelagic fishermen and the Lerwick Port Authority, but pays no dividend to its shareholders and reinvests all profits.

Managing director Derek Leask said in a prepared statement
that during 2004/05 market conditions had been favourable, which allowed the company to exploit "the full potential of its state of the art factory facilities by running at full capacity".

But he warned that during 2005 trading conditions had been tougher resulting in the company only expecting to break even.

Mr Leask said: "Primary pelagic processing is a difficult sector. This year's profit represents an 8 per cent return against turnover. The average profit on turnover since the company started trading is 4 per cent per annum.

"This represents an average return for primary processing, which the company is very pleased to have achieved - particularly in a sector such as fish processing, which often operates in unpredictable circumstances."

He added: "Such is the nature of this business that trading conditions have now changed significantly. Very aggressive competition from Norway has forced raw material prices to extremely high levels.

"Consequently, markets are offering strong resistance and, as a result, prospects for 2005 are not so optimistic. In fact, a positive result in the next year will be to achieve a break-even result."

Shetland Catch is in the process of completing a £2 million investment into value adding processing equipment.

Mr Leask said: "The equity investors in Shetland Catch view the company as a community project and therefore no dividends are paid out. All profits are reinvested to strengthen the pelagic processing industry in Shetland.

"The company also has a vigorous social responsibility policy and is pleased to have contributed financially to several community events in 2004."

The company yesterday also released figures showing that since its inception 15 years ago Shetland Catch has recorded profits of £15.8 million against a turnover of £360 million.

During this time the company has made capital investments in plant and equipment of £29.5 million. Mr Leask said: "Shetland Catch is still servicing substantial borrowings made to support these investments."