Lakeland Dairies revenue dips to €588.5m in volatile dairy market
Published 04/05/2016 | 07:18
NORTHWEST-based Lakeland Dairies recorded a slight drop in group revenues to €588.5m with prices under pressure in the volatile global dairy market.
However, the Co Cavan headquartered farmers’ co-op reported a 10pc increase to €12.8m in profit before tax last year, as it saw its milk pool soar by 13pc to 900 million litres in the post-quota era.
The annual results come as Lakeland Dairies Co-op is now on track to become the third largest processor in the country after a deal was struck this week to purchase Northern Ireland’s Fane Valley’s milk business for an undisclosed sum.
The move will bring an additional 250 million litres to Lakeland’s pool of 900 million litres of milk collected across 15 counties on a cross border basis making it the third largest processor in the country after Glanbia and Dairygold.
The co-op reported shareholders’ funds of €109m at year end.
Michael Hanley, group chief executive of Lakeland Dairies, said they have achieved positive results in spite of volatile dairy market conditions.
“We are focused on maximum efficiency across all operations. The balance within our business has enabled us to support milk price for our producers throughout the year,” he said, after dairy farmers saw prices fall in recent months.
“These are difficult times for dairy farmers. Our priority is to achieve all future growth on a long term and sustainable basis, to maximise milk price and to minimise future market volatility for all of our milk producers. We have invested considerably to ensure that we have globally competitive operations. We have the customers, product portfolio and economies of scale required to add market value to every litre of milk processed."
Lakeland also moved to begin the expansion of its milk powder processing operations at Bailieboro, Co Cavan last year, and moved to purchase the UK based Taste Trends Ltd which is behind the brand of Coolicious branded frozen yoghurts.
Staff costs amounted to €41.6m including pay and pensions, with almost 700 people working across all divisions. It was up from €36.7 in 2014 when there were 667 people on the payroll.
It saw food service revenue from products supplied to hospitality, catering and convenience markets increase by 6pc to €201.7m.
Revenues from the food ingredients division fell by 14pc to €324.4m, with 107,000 tonnes of milk powder exported last year and over 31,000 tonnes of butter.
Sales of animal feeds and fertiliser saw revenues increase by 8pc to €62.4m in the agribusiness division.