Carbery reports steady returns

Carbery has delivered earnings of €27.2m to its shareholders in 2014, up 1.9%, while profits dipped slightly versus 2013.

The West Cork-based manufacturer of value-added ingredients, flavours and cheese reported a profit of €12.7m, versus €13.2m in 2013; turnover at €316.6m was a near repeat of €318.2m in 2013.

The 2014 figures also carry an exceptional credit of €13.4m, made up of a €14.7m non-cash gain in 2014 related to the changes to the company’s defined benefit pension scheme, plus a charge of €1.3m related to the consolidation of its UK flavour-manufacturing activities.

Carbery also invested €7m last year in a new cheese vat system, bringing to €20m its investment in its Ballineen, facility in the past five years.

“We want to keep paying a strong milk price to our suppliers, while also growing our shareholder value,” said Carbery chief executive Dan MacSweeney of the group’s plans for the year ahead.

“In terms of post-quota, we didn’t have to invest much in terms of extra volume. We have been consistently investing in our facilities and we found that we’ve ended up with spare capacity,” he said.

Synergy, Carbery’s taste and natural extracts business, is growing at a rate of 9% per annum. It has completed its first full year of consolidation of the north American activities at its Wauconda, Illinois facility.

Synergy Europe is consolidating its UK sites into an expanded operation at High Wycombe, while Synergy Thailand is seeing growth in the neighbouring Asian markets of Indonesia and the Philippines.

Supported by the Irish Dairy Board (now Ornua), Carbery increased its added value sales through the Pilgrims Choice brand in the UK and through the Dubliner brand in the USA and other selected markets.

Carbery chief finance director Colm Leen said: “We will remain acquisitive, but we are not expecting to make any acquisitions this year.”

Mr Leen said milk supply in West Cork is up 10% this year. The group is predicting a 10% to 15% milk supply rise for 2015, and up by 35% to 40% in the next five years.

Carbery currently pays 31.27cpl to its suppliers, and paid a leading price during 2014 despite a collapse in global milk markets.

While likely milk supply increases in other EU member states will impact, the group plans to continue delivering a leading price to its suppliers.

Dan MacSweeney added: “To help West Cork milk suppliers manage the volatility impact on their business Carbery, through the West, Cork co-ops, has launched a voluntary fixed milk price scheme that will allow suppliers to fix the price of 10% of their supply for a three- year period.