United Group's profits soar, but boss issues a warning over post-EU future
Dale Farm parent company United Dairy Farmers has said Brexit has led to an uncertain outlook - despite a quadrupling in its pre-tax profits to £6.82m.
The United Group said sales of products from ice-cream to cheese under the Dale Farm name had driven growth in the year to March 2016.
News of improvement in sales was delivered by chief executive David Dobbin (right) - his last yearly results announcement before he retires later this year.
Growth came despite a general fall in market returns and weakness in international markets.
Last year was a tough year for Northern Ireland dairy farmers, with many taking part in protests over low milk prices. According to the latest figures from the Department of Agriculture, Environment and Rural Affairs, farmers are now receiving 17.55p per litre, compared to a recent high in 2013 of 34.7p.
But Mr Dobbin said the company had been able to overcome the challenges of falling prices by launching more consumer products. Recent launches included a protein-enriched milk aimed at the sports market.
Dr Dobbin said: "The volatility and weakness in dairy commodity markets has validated our strategy to grow in added value consumer and nutritional products and thus deliver a more competitive price to our farmers, with Dale Farm topping the rolling 12-month Northern Ireland milk price league for the reporting year.
"Dale Farm has delivered another year of strong volume growth. However, overall turnover was down due to depressed market returns."
He said Brexit had contributed to a "challenging" outlook for the present year and overall "market volatility and uncertainty". But he said growth in European milk production was slowing - which, along with the fall in value of sterling, was leading to some recovery in cheese and butter returns.
However, it was too early to say the market had recovered. "There are still significant public and privately held powder stocks overhanging the market and while the growth in milk production is slowing down, global milk output is still running at a historical high.
"The United Group is in sound financial shape with increasing profit and a falling level of debt."
United said the lower market prices led to a fall of 12.2% in group turnover to £370m. Operating profits increased from £3.5m to £9m, while pre-tax profits were up from £1.28m to £6.82m. Turnover in the overall Dale Farm division was down 5.1% to £304m, but sales of its consumer products were up 2.8% to £220m.
That growth offset a 17.5% fall in sales of ingredients to £65.5m, and a fall of around 30% in commodity sales to £26.7m. Working capital also fell by £10.4m - mainly due to the fall in dairy market returns.
Dr Dobbin will be replaced at United by Nick Whelan, current commercial director of Glanbia Ingredients.