The annual report from Laxey Glen Mills Limited shows the taxpayer owned company posted a loss just shy of £19,000 for 2020/21.
The report will go to Tynwald in March.
While news of any loss is never good, the company has brought it losses down from £33,458 in 2020 to £18,979 in the most recent financial year. Flour sales include a subsidy totalling £41,000 (2020: £41,000) from the Treasury, which is also the principle shareholder.
The annual report includes a rather detailed statement from chairman Phil Dunne who says that the pandemic and ‘extremely challenging climatic conditions’ had made it a more difficult year.
He added: ‘Through the early part of the financial year, as a consequence of demand and as a contingency against infection our team worked in shifts to ensure the Islands’ cupboards continued to be stocked with Manx flour. To do so the team had to be creative. Faced with a national shortage of 1.5kg flour bags, we bought unwanted unbranded stock and applied labels by hand and subsequently imported further bags directly from China. Although our costs rose and irrespective of the enormous demand, we held our prices unchanged as we felt, as the Island’s Mill, that it would have been wrong to seek to profit from the pandemic.’
When the Mill’s supply of wheat dropped, it was required to import from the UK. However, Mr Dunne explained that ‘limitations on access to the Mill meant that the wheat could not be shipped in bulk and consequently delivery costs were material’.
He added: ‘Nevertheless, the Mill never ran short of flour when it was needed most. In September, the first of the new harvest began to be delivered. Unfortunately, due to the exceptional weather conditions already noted the quantity of wheat was greatly reduced and additionally our major customers struggled to produce bread with the new flour to the high standards that their customers expect. We would like to offer our thanks to these customers for their forbearance and can-do attitude during this difficult period. Ultimately, a way was found to overcome the problem but as a consequence of both issues sales of flour have fallen materially against normal levels.’
As a result of this, the Mill did, at least at the time, reduce its staffing and moved to a four-day week.
Mr Dunne outlines that while there was an initial increase in demand for flour at the beginning of the financial year 2020/21, the overall turnover fell by 12%. He said: ‘Gross profit fell by c28% as a direct consequence of the difficult harvest and the reduced availability of local wheat and shipping costs increased by c£13K, because of the necessity to import wheat from the UK. This was somewhat mitigated by a reduction in cost of sales by 10% leaving net operating income down by 4%. Other Income fell slightly leaving Overall Net Income at a loss of £19K for the year.’
Rent was received during the year from the Department of Environment Food and Agriculture in respect of the Salmon Hatchery in the sum of £10,502 (2020: £10,502). Rent prepaid at the year end amounted to £10,502 (£2020: £10,502).
There was also a further £75,000 (2020: £Nil) received from the gov as part of the Strategic Review to ensure that the Mill is fit for purpose. The gov acts as guarantor for the company overdraft facility with the Isle of Man Bank. The guarantee at the balance sheet date amounted to £176,000 (2020: £176,000).