Dale Farm set to invest in its future
Dale Farm Group CEO Nick Whelan has confirmed that the £22.1m of profits announced by the company this week, for the year ending March 31 2022, will be used to manage working capital and further invest in the business.
And by investment he means, the further development of the co-op’s processing infrastructure in tandem with the ongoing delivery of the best possible milk price to farmer-suppliers.
He continued: “Dale Farm continues to grow. The securing of record profits last year will allow the business to further modernise our business which will enable us to pay a stronger milk price.
“Everything we do is about putting our farmer-members first. Securing their ongoing sustainability remains the co-op’s primary objective.”
Whelan points to the payment of record farmgate prices over the past year and the decision by Dale Farm board members not to cap milk price during the peak supply months as very clear evidence to this effect.
But Whelan is taking nothing for granted, where the future of the business is concerned.
“We are operating within an exceptionally strong inflation-led environment at the present.
“All our input costs are rising at unprecedented levels right now. In some of our business units, the average cost increase across all our product lines, relative to this time last year, is in the region of 25%.
“So the issue becomes one of getting customers to recognise and support the scale of this pressure and work with us accordingly.
“I cannot underestimate the extent of this challenge at the present time.”
That said, Nick Whelan believes that Dale Farm is well set for the challenges that are ahead.
“Cheddar cheese and whey are the key growth drivers for the business at the present time,” he further explained.
“Demand for both products continues to grow, both in the UK and Europe as a whole. Dale Farm is well placed to capitalise on these developments.”
Dale Farm’s overall group turnover came in £591m for 2021/22 (previous year £524m). Group operating profit was reported at £25.6m (previous year £14.0m); group net profit before tax £22.1m (previous year £8.2m) with earnings before interest, taxes, depreciation and amortization, or EBITDA, coming in at £33.8m (previous year £20.8m).
The milk price paid to producers for the financial year averaged at 33.88pence per litre – up 5.56pence per litre year on year – the highest Dale Farm has ever paid its farmers.
“I am pleased to see this strong performance by our cooperative and the talented people within it,” commented Nick Whelan. “Our focus is ensuring that our business is as efficient and profitable as possible so that we can pay the most competitive milk price – whilst also building a stable future for Dale Farm and the farmers who own our cooperative.”
He added: “In recent years, turnover has grown by 60% and profits have almost tripled. Achieving that means constantly adapting to change and taking difficult decisions, reviewing those areas that can no longer deliver for us and investing strongly in those that do. This year’s results are evidence that this approach is working.”
Dale Farm is owned by over 1,300 dairy farmers who supply the cooperative with milk. The average amount of milk produced per farm during the 2021/22 financial period increased by almost 4%.