Affco warns of profit cut after slow two months

By LIAM DANN

Meat company Affco has downgraded profit expectations for the first quarter of this financial year.

Chairman Sam Lewis said disappointing trading in September and October - the first two months of the year - meant profits for the quarter were unlikely to match those of last year.

Difficulties with the number of livestock processed, particularly lambs, would be exacerbated by the increased processing capacity operating or proposed in the North Island, he said.

North Island meat processors are under pressure as poor spring conditions and low lamb numbers combine with increased killing capacity.

Southland-based Alliance opened a new plant in Dannevirke this season, with the ability to handle 800,000 animals a year.

This week, Hawkes Bay company Richmond said it had traded below forecast in the first two months of its financial year.

Chairman Sam Robinson said the company was still hoping to meet its profit targets.

Yesterday, Affco shareholders voted to approve an increase in Talley's Frozen Foods' stake in their company, to 40 per cent.

Millionaire farmer Peter Spencer has also increased his stake, through investment company Toocooya Holdings, to 23.5 per cent.

The two parties divided a 4.7 per cent stake owned by Dairy Meats.

Spencer blocked attempts by Talley's to buy the Dairy Meats stake outright, which would have given it 42 per cent.