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Lakeland Dairies reports 30% increase in profits


Michael Hanley

Michael Hanley

Michael Hanley

Farmers' co-operative Lakeland Dairies has announced a nearly 30% increase in profits last year, boosted in part by increased supermarket sales during lockdown and a strong performance in Asia over the last three quarters of the year.

The company, which collects 1.9bn litres of milk from farms across 16 counties, including 1,200 in all six in Northern Ireland, posted an operating profit of £23.48m on revenues of £985m for the year to December 26.

Farmers aligned to the co-op are being paid competitive prices, now approximately 4p a litre more than this time last year, said Michael Hanley, chief executive of the Co Cavan-headquartered company. The UK average milk price in February was 29.93p per litre.

Lakeland produces 240 different dairy products, including its popular eponymous butter, at eight processing sites. It exports to over 80 countries.

The company has fared "reasonably well" more recently following the end of the Brexit transition period, and is in a "great position" with its four factories in NI and four in the Republic, said Mr Hanley.

While there are no issues with moving goods from NI to GB, Mr Hanley said they did make a "strategic decision" to avoid the land bridge across Britain to connect to the rest of Europe, and now ship all other product directly out of Ireland.

The NI Protocol, meaning no checks on the Irish border, has been important for the business, though there are some questions over mixed origin products and, going forward, support programmes in the event of a downturn.

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The pandemic has impacted the company in different ways, with consumer sales up, but food service, including to the hospitality industry, down significantly - and a see-saw situation as countries are locked down and then restrictions are lifted.

Significantly, said Mr Hanley, while quarter one sales suffered in Asia, including China, they picked up over the rest of the year.

Overall, revenues increased by over 5.7% to £985m across its four operating divisions of food ingredients, food service, consumer foods and agribusiness.

Operating profit increased 27% to £23.48m and earnings before interest, tax, depreciation and amortisation (EDITDA) was £45.44m, a rise of over 17% year on year. Shareholder funds were £187m at the close of the year.

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