Cavan-based co-op Lakeland Dairies reports 10% rise in pre-tax profits

Cavan-based co-op Lakeland Dairies reports 10% rise in pre-tax profits

Cavan-based co-op Lakeland Dairies has reported 2015 pre-tax profits of €12.8m, a 10% rise on 2014 despite very challenging global markets writes Joe Dermody.

This performance was achieved with group revenues of €588.5m, a 6% reduction due to global conditions.

It closed the year with shareholders’ funds of €109m. Lakeland’s suppliers increased milk output by 13% to 900 million litres in 2015; its potential output for 2016 now exceeds 1.1bn litres following yesterday’s acquisition of neighbouring co-op Fane Valley in Co Down.

Also during 2015, Lakeland acquired Taste Trends, the UK-based maker of Coolicious branded frozen yogurts; it began the expansion of its milk powder processing operations at Bailieboro, Co Cavan; and it 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.

Michael Hanley, group CEO of Lakeland Dairies, said: “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.

“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’s Foodservice Division revenues rose 6% to €201.7m. Its Food Ingredients revenues of €324.4m were down 14% on 2014. 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.

Lakeland 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.”

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