Arrabawn open to more buyouts after €4m profit
Better world dairy prices, higher milk volumes and Dawn takeover help to boost turnover
Arrabawn Co-op has not ruled out the possibility of further acquisitions in the future after its takeover of the Dawn Dairies business from Kerry Group helped the co-op add almost €3m to its operating profit before exceptional terms in 2010.
The Nenagh-based co-op recorded an operating profit of €4.24m before exceptional items for 2010, compared with €1.26m in 2009.
Turnover at the co-op last year was €169.1m, an increase of €43.3m on 2009. The dairy division turnover was €116.7m, compared with €76.4m in 2009, while turnover in the trading division increased to €52.4m from €49.5m in 2009. Shareholders' funds amounted to €30.6m compared to €28.9m in 2009, Arrabawn chairman Michael Flaherty reported.
The improved turnover and profit were driven mainly by better world dairy prices, higher milk volumes from suppliers, and the acquisition of the Dawn Dairies business, he said.
"The acquisition made good commercial sense for us because there was spare capacity in our Kilconnell plant and it also eliminated duplication as the two operations were collecting, processing, and distributing milk in the same geographical area," he said.
Speaking to the Farming Independent, Arrabawn financial controller Michael O'Kelly said that while there were no further acquisitions on the horizon right now, the co-op would not rule out future acquisitions.
"For the immediate future, the focus is on making what we have as efficient as possible but if something else happened or came up, we would certainly have to look at it," said Mr O'Kelly.
While Mr O'Kelly welcomed the improved dairy markets and higher milk prices being paid to farmers, he warned that too high a milk price would not be a good thing for farmers or co-ops.