Co-op enjoys record €220m turnover

Strong sales growth in the dairy and agri trading divisions, especially in the second half of the year, boosted 2013 turnover at Arrabawn Co-op to a record €220.5m.

Chief executive Conor Ryan, announcing the co-op’s annual results at its head office in Nenagh, Co Tipperary, said the increase represents a growth of 19% on the previous year.

“It is the first time that the co-op sales exceeded the €200m mark,” he said.

Arrabawn has 940 milk suppliers in Tipperary and Galway, as well as Offaly, Westmeath, Roscommon, Limerick, Clare, and Laois. It employs 300 people.

Last year’s milk price to suppliers (38.87c per litre) was the highest ever paid by the co-op, 7.38c per litre above the previous year.

Mr Ryan said the 25% sales growth to €149.5m on the dairy side equated to an increase of €29.66m, and was driven by higher market place returns and increased milk throughput.

A 9% sales increase in the agri-trading division to €70.6m was due mainly to the huge demand for animal feed during the fodder crisis in the first half of the year.

Mr Ryan said it had become increasingly important for Arrabawn to protect its own range of liquid milk products because of an ever-increasing threat to branded milk from the growth in sales of own-label brands.

It had rebranded the Arrabawn range and is receiving a very positive response from consumers.

Mr Ryan said consumers are continually looking for value for money.

“As a result, the retail market has undergone substantial change in the last two years and we are ensuring we have an operating model in place that is best suited to cope with this change.

“Consequently we have to continually reduce our costs and this will be achieved by increased automation both in the manufacturing and the dispatch areas.”

Operating profit before exceptional items last year was €2.77m, an increase of 142% or €1.63m on 2012.

Profit before tax was €1.8m compared with €400,000 in 2012, up 350%. Earnings before interest, tax, depreciation and amortisation was €6.88m, which is €2m higher than 2012.

Net debt was reduced by 28% to €10.1m by year end, while shareholders’ funds increased by 6% to €37.6m.