Volac, the UK-based dairy ingredients and animal nutrition group, returned to profit last year thanks to higher sales volumes and improved profit margins in dairy. For 2019, Volac made operating profits of £8.2m (€9m) as profit margins recovered to a healthy 3.2%.

The company had recorded an operating loss of almost €3m in 2018, which it blamed on weak dairy markets. However, for 2019 Volac said it saw good sales volume growth and improved margins in both its animal feed and dairy ingredients business.

Overall, the company recorded sales of just under £260m (€285m), which was up 7% year on year. The healthy sales growth was driven by very strong growth in sales to Irish customers in particular. Volac’s sales to customers in continental Europe remained steady at £126m (€138m), while sales in the UK market slumped 16% year on year to £56m (€62m).

Despite the sale of the business, Volac’s net debt at year-end increased to £31m

During the year, Volac disposed of its 50% stake in a Dutch dairy ingredients business, DV Nutrition, which manufactures whey protein and lactose ingredients. Volac sold its 50% in the business to its joint venture partner DMK, a German dairy co-op, for a total of £33m (€36m). Despite the sale of the business, Volac’s net debt at year-end increased to £31m (€34m).

Founded in the 1970s, Volac is privately owned by the Neville family in the UK and has net assets of £120m today. The company paid a dividend of £2.5m (€2.7m) to its controlling shareholders last year, which was down on the £6m dividend paid out in 2018.