Annual Results 2015
Lakeland Dairies reports 10% increase to €12.8m in Profit Before Tax, from revenues of €588.5m in 2015
Lakeland Dairies has reported a positive business performance in spite of volatile global dairy market conditions, in the co-operative’s annual report for 2015.
Group revenues of €588.5m reflect a 6% reduction due to global conditions where there is continuing pressure on the returns from the markets.
- Profit Before Tax increased by 10% to €12.8m.
- The Society concluded 2015 with a strong balance sheet and shareholders’ funds of €109m.
- During the year, Lakeland Dairies acquired Taste Trends Ltd., the leading UK based maker of Coolicious branded frozen yogurts.
- Lakeland Dairies also commenced the expansion of milk powder processing operations at Bailieboro, Co. Cavan, which proceeded on schedule throughout the year.
- The co-operative opened a new Global Logistics Centre at its dairy foodservice manufacturing site in Newtownards, Co. Down, and other dairy processing sites, including Killeshandra, Co. Cavan, were also upgraded.
- Milk supply volumes (currently 900 million litres of milk per annum) increased by 13% which contributed to overall efficiencies across all dairy processing operations.
Performance by Division
Foodservice Division revenues increased by 6% to €201.7m, bolstered by continuing business development initiatives and consistently strong demand for the innovative products that Lakeland Dairies sells across the hospitality, catering and convenience market segments. Lakeland is the dairy foodservice market leader in Ireland and the UK. The foodservice market continues to benefit from gradually improving consumer sentiment, with strong interest for Lakeland Dairies products and a consequent increase in volumes shipped.
Food Ingredients Division revenues of €324.4m reduced by 14% reflecting lower market prices where there is an oversupply of dairy products on world markets due to an increase in global milk production which is particularly evident in Europe. Lakeland Dairies Food Ingredients produced record volumes with 107,000 tonnes of milk powders exported last year, including caseins, and over 31,000 tonnes of butter.
Agribusiness Division revenues increased by 8% to €62.4m, based primarily on sales of 162,000 tonnes of high quality animal feeds and over 25,000 tonnes of fertilisers. Growth in feed volumes was supported by incremental new business and some increases in feed use following the abolition of milk quota.
The co-operative’s Rumismart Sustain programme continued to support higher production by farmers from static or reduced resources. Lakeland Dairies also announced a further phase of its Joint Research Programme with Teagasc which uses local analysis to assist farmers in making informed decisions around the productivity of their farms.
Michael Hanley, Group CEO of Lakeland Dairies said:
Lakeland Dairies continues to make strong progress. As well as strategic developments, we have achieved positive business 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.
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 Dairies’ Chairman, Alo Duffy said:
Following from the abolition of quotas and the ongoing imbalance in global dairy markets, 2015 was a challenging year for milk producers and the dairy industry. The goal of all our developments is to underpin and maximise milk price while retaining our capacity to re-invest in the business. This will be achieved through a sustainable business model including appropriate economies of scale with in-built efficiencies, cost effectiveness and a focus on quality, innovation and growth.
Lakeland Dairies is a leading global provider of excellent dairy products made to the most exacting international standards of quality, traceability and reliability across all applications. The co-operative currently processes 900 million litres of milk each year, supplied by dairy farmers from 15 counties on a cross border basis. Following from the agreement (effective 01 May 2016) to acquire Fane Valley’s dairy business at Banbridge, Co. Down, Lakeland Dairies will process over 1.1 Billion litres of milk annually. Lakeland Dairies markets 230 dairy foodservice and food ingredient products to 77 countries worldwide, exporting close to 100% of its entire production capacity to every corner of the globe.