Dale Farm reports 19% jump in pre-tax profits to £12m

Dale Farm, the North’s largest farmer-owned dairy co-op, has reported a 19 per cent jump in pre-tax profits to £12 million (€13.3m) in its latest financial accounts despite the “big distraction of Brexit”.

Nick Whelan, group chief executive of Dale Farm, said the co-op, which is made up of more than 1,300 dairy farmers across the North, England and Scotland, also grew its turnover by 5.6 per cent in the 12 months to March of this year to £509 million.

It marks the fourth consecutive year of solid growth for the co-op, and Mr Whelan said one of the factors behind its success has been its approach to “managing” the inherent volatility in the sector.

“Volatility is a big issue in the dairy sector – both in terms of the supply chain and at farm level it’s massive, and in the last three to four years we have worked very hard to support our farmer owners.

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“We’ve strengthened our balance sheet, and we paid the leading milk price as per the 12-month rolling milk price league in Northern Ireland throughout this past financial year.”

The latest set of accounts also show Dale Farm grew its group operating profit by 18 per cent to £14.3 million, while EBITDA also jumped by 15 per cent to £20.9 million.

Mr Whelan said the “hugely positive” results were achieved despite the “big distraction of Brexit”.

“I’ve been very vocal that I believe a no-deal Brexit is a disaster, not just for the agriculture sector in Northern Ireland but for Ireland and the whole of the UK. My challenge over the last year has been to convince some farmers that Brexit is not good for you – half of our members get it, half don’t.

“If there is no deal it will be very hard to plan. I believe we have massive opportunities for growth, particularly because there is a growing consumer trend to connect with real supply chains – to know exactly where the product is coming from and that is great for us.”

But he believes that in general “Brexit is bad news” because it may already be casting a shadow over potential opportunities for the North’s agricultural sector.

Cheddar cheese

Last year Dale Farm won a contract with Lidl to supply cheddar cheese to 8,000 stores in 22 countries. It was the largest single deal that the retail group has agreed with a Northern Ireland agri-food company to date.

Yet Brexit could put this kind of partnership in jeopardy for the likes of Dale Farm and other companies in the North if the UK were to crash out of the EU without a deal in October.

Mr Whelan said over the last four years Dale Farm has invested £30.2 million in its facilities and operations and in the latest set of accounts the co-op has reported a 15.8 per cent group Return on Capital Employed.

According to the group chief executive Dale Farm’s long-term focus will remain unchanged regardless of what the outcome may be with Brexit.

“Our co-operative ethos is underpinned by a long-term vision to support dairy farming across Northern Ireland and Great Britain, and that will remain the driving force behind our development going forward.

“This ethos has attracted a significant number of new members and suppliers over the past financial year, with growth of over 7 per cent in our milk pool,” Mr Whelan said.