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Anzco posts weaker 2014 profit after taking control of Five Star Beef

Anzco Foods, New Zealand's third-largest meat company, said profit halved in 2014, a year in which it bought out shareholder Itoham Foods' half stake in the nation's only large-scale cattle feedlot.

Profit fell to $6 million in the 12 months ended Sept. 30, from $12.2 million a year earlier, according to the Christchurch-based company's financial statements. Revenue declined 1.8 percent to $1.26 billion, led by a 1.9 percent fall in sales to $1.25 billion. Expenses slipped 1.3 percent to $1.24 billion.

Anzco, which ranks behind Silver Fern Farms and Alliance Group, last year took full control of feedlot operator Five Star Beef by buying the half stake owned by Itoham, Japan's second-largest meat processing company. It paid $9 million cash as part of a total consideration of $20.9 million including an amount transferred from investment in associates, marking the third joint venture with Itoham it has taken over after Anzco Prepared Foods and Anzco Gourmet Foods.

Itoham, Anzco's biggest shareholder, said last month it plans to spend about $40 million to lift its stake to 65 percent from 48.3 percent, buying shares from Japan's Nippon Suisan Kaisha, Anzco chairman Graeme Harrison and Janz Investments, which is majority owned by Harrison in association with senior Anzco managers. The deal, which would take Anzco's overseas ownership to 81.8 percent from 73.5 percent, is currently being assessed by the Overseas Investment Office.

Anzco is aiming to tap into the global network of Japanese conglomerate Mitsubishi Corp, which became Itoham's largest shareholder in 2009 and has said it aims to become "the most trusted manufacturer of processed meat in Asia". Itoham has previously been focused on the Japanese domestic market while Mitsubishi's food division Living Essentials Group targets emerging markets in Asia, especially China, Indonesia and India.

Anzco paid its shareholders a total of $4.4 million of dividends last financial year, unchanged from the previous year, according to its financial statements.

The company's inventory was 9.6 percent higher at the end of the 2014 financial year compared with the year earlier. Raw material inventory was 26 percent more at $10.4 million, while finished product was 8.1 percent higher at $93.8 million.

ANZCO executives weren't immediately available to answer questions about the results.