Oaklands Farm Eggs has posted a pre-tax loss for the last financial year after multi-million-pound investment in cage-free systems.
The company made a loss before tax of £2.6 million in the 12 months to the end of March 2019.
In the same period last year Oaklands made a profit of just under £2 million.
Director Elwyn Griffiths said in his strategic report that the financial results had been affected by the company's investment in cage-free systems.
“With £8 million invested in plant and machinery over the last few years, the company now has systems fit for purpose.
“The exceptional development costs, loss of sales and human resources to achieve this gave us one off costs of £2,970,000 to the business.
“This has obviously impacted on financial performance,” he said in his report.
In his annual report last year, Elwyn said the company aimed to become the UK market leader in barn egg production.
He said the company was already supplying customers with barn eggs and added: “The business plans to become market leaders with cage-free barn production in a similar way to how we have led on colony egg production.
“The business plans to convert units at a rate of a new unit every 20 weeks to a target of over 500,000 cage-free birds.
“The business is now structured to take on more capacity to allow the supply of colony eggs and also to still enable the business to proceed to supply the cage-free market with the highest welfare standards.
“The company will work with the NGOs to establish the best outcomes for bird welfare.”
In his latest report with the 2019 accounts, Elwyn said the company had achieved its target.
“Our ambitious targets of rearing a unit every 20 weeks to become first and largest to market with cage-free egg production we achieved with over 500,00 birds being reared and in lay.
“The company led in the conversion to colony cage from battery cage and are ahead of the market in the new cage-free side of the business.
“This has led to the biggest challenge the family business has ever faced in adapting and developing systems fit for purpose.”
The latest accounts highlight the impact the investment has had on the financial performance of the business over the last 12 months.
Turnover was £66.3 million in 2018. It was £63.5 million in 2019. Oaklands suffered a pre-tax loss of £2.6 million.
Elwyn Griffiths pointed out in his strategic report for 2019 that there was no legal requirement for egg producers to go cage-free.
However, he said: “The company believe that to maintain a competitive advantage the business should offer a choice of all four legal production systems to be able to supply across all customer requirements.”
All major retailers in the UK and some leading food manufacturers have committed to moving away from using cage eggs by 2025 following pressure from animal welfare campaigners.