Lakeland Dairies sees strong growth in global sales

Lakeland Dairies, which has substantial operations in Northern Ireland, has reported strong financial results for the year ended 31st December 2017, with group annual revenues increasing by 33 percent to £683 million, up from £514.6 million in 2016. This yielded an operating profit of £14.9 million, compared to £6.2 million in 2016.

Profit before tax was £14.1 million in 2017 and the co-operative closed the year with a 19.5 percent increase in shareholders' funds at £104.3 million, up from £87.3 million the prior year.

Earnings before interest, depreciation, tax and amortisation (EBIDTA) were £28.9 million, increasing significantly from £16.2 million in 2016.

Milk volumes processed in 2017 increased to over 1.2 bn litres, reflecting ongoing expansion among Lakeland Dairies' 2,500 milk producers and a full year of milk supply from Fane Valley dairy farmers (following from the acquisition of Northern Ireland's Fane Valley Dairies in May 2016).

Michael Hanley, group chief executive, said: "In 2017, Lakeland Dairies achieved performance improvements across all divisions of the business. Trading conditions were helped by a reduction in global milk supplies and product availability. We were able to take advantage of these conditions through our efficient processing capabilities and worldwide market presence, achieving satisfactory results.

"Our global growth has been driven by our strategy, investments, product range and the high quality output of our milk producers. While there are challenges in the global market, it is our intention to continue to drive competitiveness and overall growth, targeting opportunities across infant formulas, dairy proteins and health-related nutritional products.

"With the investments we have made, we are now in a position to process more milk than ever before. We are focused on business performance improvements through continuous innovation, organisational development and further enhancements in operational efficiency."

The co-operative has also retained and fully maintained its milk powder and butter facility at Banbridge, county Down, which provides continuing flexibility and opportunities in relation to any potential Brexit outcomes.

Lakeland Dairies has a technologically advanced Global Logistics Centre and major dairy processing site at Newtownards, county Down.

The efficiencies being achieved through all operations enabled the removal of milk collection charges (cartage), with an overall reduction of costs of £4.4 million to milk suppliers annually.

Farmer owned Lakeland Dairies operates across 15 counties on a cross border basis, processing milk into a wide range of value-added dairy foodservice products and food ingredients.

Lakeland has a portfolio of 240 different dairy products which it exports to 80 countries worldwide.

Revenues at the Lakeland Foodservice Division increased by 28% to £212.7m in 2017.

The major Lakeland processing centres at Newtownards and Killeshandra, county Cavan continue to increase output year on year, producing record volumes of butter products, ice cream, cream and cream blends. The long standing reputation of Lakeland Dairies' products for quality, taste, functionality and reliability underpinned the confidence being demonstrated by customers in key markets such as the UK, Middle-East, Europe, Asia and China. These markets performed well against a backdrop of volatile commodity input costs, the need to increase selling costs and intense competition.

Pic: The Lakeland high-tech logistics centre at Newtownards in Northern Ireland