Lakeland Dairies, the Irish milk processing and feed manufacturing co-operative, has reported a 10% higher profit on 6% reduced revenues from its latest full year’s trading.
The business made a profit before tax of €12.8 million on revenues of €588.5m in the 2015 year, compared to €10.9m and €625.8m in the previous year. Shareholder funds were €109m at the year end, up from €93.3m a year before.
Based in Co Cavan to the north of the Republic, the company trades on both sides of the border and covers the northern half of the island. Its proposed feed manufacture and dairy processing merger with Fane Valley fell through last month – instead the business has acquired the Fane Valley Dairies operation.
Lakeland’s Agribusiness Division increased its revenues by 8% to £46m in 2015, with sales of 162,000 tonnes of animal feed and 25,000 tonnes of fertilisers. It says the growth in feed volumes was down to an incremental rise in new business, together with some increase in demand following the abolition of EU milk quotas in April that year.
The division has started a further phase of its Joint Research Programme with the Irish state agricultural service Teagasc, using local analysis to assist farmers in making informed decisions around the productivity of their units. It is also providing its dairy farmer customers with support through the Lakeland Rumismart Sustain programme designed to achieve higher farm production from static or reduced resources.
The Dairies division processed an additional 13% milk, bringing the total up to 900 million litres during 2015. This is set to increase to 1.1 billion litres following the acquisition of Fane Valley’s dairy operations at Banbridge in Co Down.
During the year, Lakeland acquired Taste Trends, the Surrey-based yoghurt maker; invested to expand its milk powder operations at Co Cavan and opened a new global logistics centre at its site in Newtownards, Co Down.
The Food Ingredients division saw revenues fall by 14% to £239m in line with the lower milk prices and global oversupply. But it produced record volumes, with 107,000 tonnes of milk powder and caseins exported last year, and over 31,000 tonnes of butter.
“These are difficult times for dairy farmers,” says Lakeland chief executive Michael Hanley. “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."