The Chairman presents his statement for the period.
Principal activities:
The principal activity of Scottish Craft Butchers during the year continued to be the provision of advice, support and training services to the meat trade.
Scottish Craft Butchers has no share capital and is a private company limited by guarantee with each member undertaking to subscribe, up to a limit of £1, such amounts as may be necessary to pay the debts and liabilities in the event of being wound up.
Results for the year:
The profit/(loss) for the year (after tax) amounted to (£18,653) (2023 - (£4,075)).
Executive Manager’s review of activities and future developments:
We have seen another year of challenges and change for our organisation and our members. The meat trade is still under what feels like continual attack from veganism, calls to reduce red meat consumption to save the planet and expectations to become more eco-friendly. Add to that rising operational costs, and increases affecting the whole supply chain that has led to dented confidence for businesses and consumers. We also must consider the continued weakening of “high street” shopping locations and extortionate energy costs.
Members have been informed of changes to legislation and guidance issued, they have then had to act accordingly.
Members have adapted well to all challenges that presented themselves. We are an industry with a strong resilience.
Another year where butchers need the regular flow of advice, support, and training services that the SCB continues to provide.
Circumstances have changed continually over the decades but with the guidance of its President and his Executive Committee, SCB continues to provide a meaningful service to its members through the Members Services and Training Services sides of the business.
Most meetings of the Executive Committee have been held via video conference since the start of the COVID-19 pandemic, we are now utilising a hybrid system of meetings due to the investment made in our meeting room at the office.
New members of the committee have joined over this period, finding the facility to join the meeting from home preferential to having to travel.
Member Services promotes the consumer facing image of SCB and Training Services operate under the name Craft Skills Scotland (CSS). Both sides aim to provide quality support to the meat industry and the craft butcher sector. They also perform the role of representing the sector and responding to consultations and consumer questions / requests. Members’ subscriptions only fund SCB. CSS is a wholly owned standalone subsidiary whose objective is to promote and sustain the craft skills of the industry.
SCB is delighted to provide administrative support to the Guild of Q Butchers. This service to over 75 butchers GB wide operates out of the Perth office, and this provides a valuable contribution to overheads.
SCB members continue to have issues over inconsistency of food safety regulation and varying interpretations on guidance, but the SCB Executive Manager’s membership of the Scottish Food Enforcement Liaison Committee continues to provide an important and useful contact with the enforcement community especially in this post COVID-19 era we are living in.
We are constantly advising members to have EHO’s recommendations formally documented so that all parties can try to achieve some semblance of uniformity of approach.
SCB has assisted where the need for allergen advice has emerged with renewed focus. Safe methods for accepting customers own re-usable containers have also been advised to members.
Representation continues to the Scottish Government’s Animal Health and Welfare Stakeholder Group and SCB is proud of its working partnerships with the likes of Quality Meat Scotland, the National Sheep Association, the Scottish Association of Meat Wholesalers, the Institute of Auctioneers and Appraisers and the National Farmers Union Scotland.
Membership has held up well given the aforesaid. Some new shops have opened, there continues to be a few retirals, but focus is still required on assisting with succession planning, business takeover and introducing new young owners. In many cases butcher’s shops are very good and viable businesses and it is a matter of identifying potential new owners who will undoubtedly inherit successful businesses with good returns.
The number of shops in Membership is 353: 267 businesses (287 in 2023) plus 86 branches (82 in 2023).
Competition in the sector continues to be challenging with discounter supermarkets making a bigger impact not only to independents, but other established multiples. Retaining customers in the face of new economic pressures is the new challenge. Energy costs will be a worry for many members in the months and years ahead.
It has been increasingly important for SCB to provide members with guidance and advice to enable business to continue to trade profitably. Members have been kept up to speed with all the developments in the meat industry, regional meetings are a critical interface to exchange views and disseminate information. Product evaluation events have kept the independent butcher in the news highlighting quality meat products. We feel it is vitally important that all channels should be used to promote business and attract new and younger customers. It is also essential that we encourage new talent into the sector as the ageing workforce will come up for retirement.
A close relationship with Quality Meat Scotland has created heightened support and a better understanding of the Craft butcher sector and its importance to the meat industry. We are grateful to QMS and the Scotch Butchers Club for the sponsorship of the new Craft Butcher Diploma of Scotland which gives accreditation of the exceptional skills of individuals in the industry.
Both sides of the organisation – SCB and CSS continue to be well used and appreciated by the membership.
Our training arm, Craft Skills Scotland (CSS), continues to contract SDS for funding and CSS successfully tendered for Modern Apprenticeship places. 211 trainees are currently on funded training, 131 trainees achieved Modern Apprenticeships in the last contract year. 145 trainees came on to training in the last contract year while 59 of the allocated 171 places in the current contract have been taken up. 6 Craft Butcher Diplomas were presented during the year.
CSS staff changes last year affected performance this year. The ability to maintain income streams is challenging and involved costs to the company of training a new assessor. However, we feel the team is now settled and income targets are clear for 2024/2025 .
We continue to be a training provider for the Brewing, Modern Apprentice, qualification. We are working with several breweries across the country, some in rural locations which entail higher costs for delivery.
SCB continues to be an awarding body in partnership with Scottish Qualifications Authority (SQA). Distance Learning Foundation Hygiene and Foundation HACCP are delivered to our trainees.
Two Meat Managers HACCP and Hygiene Course was held during the year with the 18 candidates attending achieving a high standard of certification.
Regional meetings were held in October 2023 in – Stepps, Carfraemill, Perth, and Elgin. A further round of meetings in the same venues were held in May 2024. All have been very well attended and well received.
The newsletter has been published timeously on the first day of each month.
We have 37 Corporate members, (34 in 2023). They have been great supporters to SCB and hopefully they have gained sufficient business in return to justify their continued support. Many have made good use of free inserts or adverts in the Newsletters and the platform available through regional meetings.
The Steak Pie and Speciality Pie evaluations were held in September 2023 with the results announced at the regional meetings in October 2023.
The Beef Link, Black Pudding and Home Cured Bacon product evaluations were held in April 2024 with the results announced at the regional meetings in May 2024.
“Porktober” promotional activity continues to gather interest each year with more organisations joining in. The marketing initiative has been nominated for an award at the National Pig Awards.
We will hold the World Haggis Championship in 2025 with the judging taking place at the trade fair along with the Scottish Pork Sausage Championship.
Increased resource to take professional photographs and generate professional press releases has generated good PR for independent butchers from these evaluations and competitions.
The winner of the World Haggis Championship 2023, Coopers Butchers in Bellshill even had a visit from the First Minister.
Our Employment Law advisers continue to enhance the services offered by SCB. A Health and Safety adviser is also retained to provide members with advice.
For the One Hundred and Fifth Annual General Meeting, SCB went to Dundee. It was held on 22nd November 2023 in the Landmark Hotel where George Jarron was re-elected as President. The very well attended meeting was fortunate to attract top speakers – Tom Gibson QMS, Peter Myles National Sheep Association and Nigel Ovens from McCaskies Butchers in Wemyss Bay - all of whom had fantastic stories to tell that proved inspirational to all who attended.
The SCB Training Awards were again held in conjunction with the AGM. Generously supported by QMS and SQA this complemented what was a very positive day and again there was a great show of the emerging talent in our industry.
SCB remains highly accessible to members and members’ views are constantly canvassed when either telephoning, attending meetings or visited by any of the CSS assessors.
Finally, I would like to record the valuable contribution made by all members of staff. Bruce McCall continues to be the first point of contact for members and Claire Simpson who is responsible for all things training. Thanks to Joyce Miller, Gordon Wallace, Willie Kemp, Sarah Frew and Robbie Hughan, they have all been an invaluable source of support to me over the last 12 months.
Scottish Craft Butchers is a private company limited by guarantee incorporated in Scotland. The registered office is 8 /10 Needless Road, Perth, PH2 0JW.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to surplus or deficit.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Operating Leases
Rentals paid under operating leases are charged to profit & Loss on a straight line basis over the lease term.
Government grants
Grants are accounted under accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to the profit & loss at the same rate as depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of revenue nature are recognised in the Statement of Income and Retained Earnings in the same period as the related expenditure.
Pensions
The company operate a defined contribution scheme for the benefit of its employees. Contributions payable are recognised in the profit and loss account when due.
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Tangible fixed assets are depreciated over a period to reflect their estimated useful lives. The applicability of the assumed lives is reviewed annually, taking into account factors such as physical condition, maintenance and obsolescence.
Fixed assets are also assessed as to whether there are indictors of impairment. This assessment involves consideration of the economic viability of the purpose for which the asset is used.
An apportionment of shared expenses are allocated to members services. The application is consistent with prior years and reasonable when considered in line with profit levels.
A percentage of shared overheads are allocated to other organisations occupying the building, based on the space utilised. Staff time is also allocated out for services performed; this is estimated by the Chief Exec. Estimates were deemed to be reasonable and consistent.
The property included in land and buildings is held at fair value.
The property at 8/10 Needless Road is valued at £220,000. The last formal valuation was performed in 2017, the valuation remains the same based on the directors estimates of value.
The average monthly number of persons (including directors) employed by the company during the year was:
Included in land and buildings is the property at 8/10 Needlless Road, Perth.
The fair value of the property has been arrived at on the basis of a valuation carried out in October 2017 by Graham and Sibbald Charted Surveyors, who are not connected with the company. The valuation of the property was £220,000, which the directors believe to still be a fair valuation.
Listed investments have been revalued at market value. This is based on an independent valuation which is carried out by Redmayne Bentley an Investment Management Company who also provide stockbroking services. The original cost of the listed investments is £66,462 (2023 - £66,462)
There has been no recent valuation of the unlisted investments including the president's chain and trophies. The wholly owned subsidiary Scottish Federation of Meat Traders Association were dormant throughout the financial year.
Summary of investments
Investment risks
FRS 102 requires the disclosure of information in relation to certain investment risks. Theserisks are set out by FRS 102 as follows:
Credit risk: this is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.
Market risk: this comprises currency risk, interest rate risk and other price risk.
- Currency risk: this is the risk that the fair value or future cash flows of a financial asset will fluctuate because of changes in foreign exchange rates.
- Interest rate risk: this is the risk that the fair value or future cash flows of a financial asset will fluctuate because of changes in market interest rates.
Other price risk: this is the risk that the fair value or future cash flows of a financial asset will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market.
The Fund has exposure to these risks because of the investments it makes to implement its investment strategy. The directors manage investment risks, including credit risk and market risk, within agreed risk limits which are set taking into account the Fund’s strategic investment objectives. These investment objectives and risk limits are implemented through the investment manager agreements in place with the Fund’s investment managers and monitored by the directors by regular reviews of the investment portfolios.
Credit risk
The Fund invests in pooled investment vehicles and is therefore directly exposed to credit risk in relation to the instruments it holds in the pooled investment vehicles and is indirectly exposed to credit risks arising on the financial instruments held by the pooled investment vehicles.
Analysis of direct credit risk
Direct credit risk arising from pooled investment vehicles is mitigated by the underlying assets of the pooled arrangements being ring-fenced from the pooled manager, the regulatory environments in which the pooled managers operate and diversification of investments amongst a number of pooled arrangements. The directors carry out due diligence checks on the appointment of new pooled investment managers and on an ongoing basis monitor any changes to the regulatory and operating environment of the pooled manager.
Pooled investment arrangements used by the Fund comprise authorised unit trusts.
Indirect credit risk arises in relation to underlying investments held in the bond pooled investment vehicles. This risk is mitigated by only investing in pooled funds which invest in at least investment grade credit rated securities.
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
The pension cost charge represents contributions payable by the Company to the fund and amounted to £6,858 (2023 - £7,308). Contributions totalling £2,230 (2023 - £1,587) were payable to the fund at the balance sheet date and are included within creditors.
The company is limited by guarantee, not having a share capital and consequently the liability of members is limited, subject to an undertaking by each member to contribute to the net assets or liabilities of the company on winding up such amounts as may be required not exceeding £1.
The auditor's report was unqualified.
The Company received grant funding from Skills Development Scotland. This grant may be repayable should the Company fail to continue to comply with the grant conditions. The grants are audited by Skills Development Scotland and comply with all conditions set.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows: