Business

Farm co-op Lakeland Dairies sees sales smash €1 billion barrier

One of the Lakeland Dairies' Northern Ireland operations at Artigarvan in Co Tyrone
One of the Lakeland Dairies' Northern Ireland operations at Artigarvan in Co Tyrone One of the Lakeland Dairies' Northern Ireland operations at Artigarvan in Co Tyrone

GROUP revenues at cross-border dairy processing co-operative Lakeland Dairies has broken through the billion euro mark for the first time, it has revealed.

Results for the 2019 calendar year show that sales increased by 27.7 per cent to €1.03 billion (£880 million), meaning it has doubled revenues in just five years.

That resulted in an operating profit of £17.53m (€20.5m), up by nearly 11 per cent per cent (or £1.73m) on the previous year, while earnings before interest, tax, depreciation & amortisation (Ebitda) increased by £6.18m to £36.68m.

Lakeland Dairies ended the year with a significantly enhanced balance sheet including shareholders' funds of £168.63m.

It was the first full year's trading since the historic merger of Lakeland Dairies and LacPatrick Dairies was completed in April 2019.

Lakeland Dairies collects 1.85 billion litres of milk from 3,200 farm families across 16 counties in Northern Ireland and the Republic.

The co-operative has a portfolio of 240 different dairy products made on eight processing sites which it exports to 80 countries worldwide.

Broken down by sector within the business, the biggest contributor to sales was its food ingredients division, where revenues increased by 12.6 per cent to £499.2m following strong demand for its enriched powders, proteins and dairy fats, and organic growth across the combined ingredients operations of both former societies.

Sales at its foodservice division rose to £204.4m while consumer foods delivered a solid performance in 2019, yielding revenues of £119.46m.

Lakeland Dairies’ agribusiness division had sales of £61.91m after it achieved feed volumes of 210,000 tonnes and fertiliser volume of 27,000 tonnes.

Group chief executive Michael Hanley said: “We’re pleased to report this strong and prudent set of accounts. It was a positive 2019, based on a strong and efficient performance across all operating divisions, done while leveraging from additional revenue streams and the overall synergies achieved by the merger.”

He added: “We are driven by delivering further value and long-term sustainability for our farm families, north and south, while providing competitive advantage for our global food ingredients customers in 80 markets worldwide.”

But Mr Hanley pointed to considerable challenges ahead and warned: “The ongoing market disruption caused by the Covid-19 pandemic has put a significant drag on markets, particularly in the foodservice sector, while a lack of clarity on the shape of the trading relationship between the EU and the UK post-Brexit is also of concern to us.”