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The largest buyer of milk in NI, Lakeland Dairies, has recorded another solid set of financial results, with operating profit of £23.6m for the year ending 1 January 2022. With turnover crossing £1bn for the first time, to finish the year at £1.09bn, it leaves operating profit margin at 2.2%. EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) was £46.4m.
In Sterling terms, operating profit is only up slightly from the £23.48m recorded for the previous year, but that figure is masked by changes in the exchange rate at year end used to convert from Euro to Sterling (for the benefit of NI suppliers). The Lakeland accounts, filed in Euro, show turnover was up 20% to €1.31bn, and operating profits up 8% to €28.2m.
The major revenue stream within the Lakeland business continues to be food ingredients, which recorded output of £696.6m in 2021, on the back of over 280,000t of milk powders and butter, including product from the Lakeland factory in Artigarvan, Co Tyrone.
The Pritchitts factory in Newtownards is included within Lakeland’s food service division alongside the facility at Killeshandra, Co Cavan, and combined they recorded revenues of £187.6m. That leaves a consumer foods division, which incorporates the Ballyrashane site, and had revenues in 2021 of £142.6m, and the Lakeland agribusiness division, which mainly sells feed and fertiliser, and had revenues of £72.5m.
Robust
Speaking to the Irish Farmers Journal, Lakeland CEO Michael Hanley said 2021 was a good year for the co-op, reflected in a “robust set of accounts”.
He confirmed that milk volumes were up 100m litres in 2021, and is confident there is enough capacity in the business to handle volumes out to 2024. Hanley also defended the new milk supply management scheme, starting in 2023, which will apply a deduction on new milk during the April to June period, suggesting that it was a “signal” to producers that new stainless steel does not arrive “free of charge”.
“We are not afraid to invest in the business. We are not afraid of more milk,” he said, adding that “if it makes sense” the co-op will look again at the former Fane Valley site at Banbridge. It currently operates a butter processing line for 5 – 6 months of the year, but if it was to re-start drying milk, significant capital investment would be required.
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