November 2004

Defra constraints challenge

Progress: Trevor Hebdon outlined to shareholders the present situation with the commercial development project.

The recovery of outstanding fees for valuations during the 2001 foot and mouth epidemic and the continuing Defra constraints affecting livestock sales were among the hurdles the H&H Group had to overcome in its quest to further grow profits, the Group's annual meeting in Carlisle on Friday October 29th 2004 was told.

A well-attended meeting approved the Group's annual report and accounts to June which showed a year of substantial progress with a profit before tax of £455,000, an increase of more than 13 per cent on the previous 12 months. The meeting approved an enhanced final dividend of 10p per share, to be paid on December 10 to shareholders on the register on November 19, an overall rise of 11.5 per cent on the previous year continuing the Group's policy of steady increases in dividend commensurate with profitability. The Group's profit growth reflects a year of increased turnover, up by nearly £1 million on the previous year to £7.5 million. In response to a written question from a shareholder a to whether the Group had considered a stock exchange listing Group chairman David Trimble, in presenting the 112th annual report and accounts, said it was the Group's intention to be in business for another 112 years - unlike the fate of some locally owned and listed companies which are taken over by larger organisations and then close.
" We are now virtually reduced to holding sales on alternate days due to Defra constraints with the aim of preventing another disaster happening like that in 2001, but it puts enormous burdens on our staff as well as the logistics of moving livestock," said Mr Trimble.
" We want to maintain the auction mart system as we feel quite strongly that it provides a safety valve for farmers between themselves and the big meat buyers."

H&H Group chief executive Trevor Hebdon said that, through lawyers on both sides of the border, the Group continued to press for payment of outstanding foot and mouth stock valuation fees.
" As a result of this pressure, Defra has agreed very recently to meet us to see if a resolution can be found. Seerad has also had an opening discussion with our Scottish lawyers. We firmly believe we are owed a not insubstantial sum of money for valuation work carried out during 2001," Mr Hebdon told the annual meeting.
" During foot and mouth we were all working towards eradicating the disease and there was a necessity for valuations to be carried out at extremely short notice under difficult conditions. Throughout there was an implicit trust by us that Defra and Seerad would treat us equitably," he added.

Mr Hebdon also outlined the progress of the commercial development project on the 10-acre site to the immediate south of the main Borderway complex. The Group was successful earlier in the year at the public inquiry in gaining planning permission on the site, and the option agreement with the original developer had now expired. As a result, the Group was in discussion with six other interested developers and/or hotel operators for the site.

Mr Hebdon said that, since the year-end, the Group had continued to trade profitably, on budget and at a not dissimilar level to the same period last year. However, the individual performances of the Group's operating companies were more mixed with factors such as CAP reform, rising interest rates, the slowing of the housing market and the rising price of oil having their effects.

Auction of Group shares
At auction, following the AGM on Friday October 29, 1840 ordinary shares in H & H Group were sold in the ring at Borderway Mart. Auctioneer, David Pritchard sold all of the shares to new and existing shareholders achieving a top price of £8.20 and an average for the sale of £ 8.05. The previous auction in February 2004 had produced a top price of £ 7.00 with an average of £6.67.

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