UK results affected by rationalisations
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- 02 December 2004
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Arla Foods UK plc’s underlying pre-tax profit (before exceptional items) for the first 18 months was £52.1 million with sales of £1.7 billion. The net result after tax was a loss of £1.7 million.
“I’m pleased to announce that our results are in line with our expectations, and that the expected synergy benefits of the merger are on track for delivery ahead of schedule,” says Sir David Naish, Chairman, Arla Foods UK plc.
He is referring to the post-merger rationalisation of production which has proceeded ahead of plan and is expected to be completed in mid-2005. It includes the closure of the Bamber Bridge dairy and the glass bottling line at Hatfield Peverel and the announced closure of the Ruislip and Newcastle upon Tyne dairies in 2005.
Early in 2005 Arla Foods UK plc will withdraw from its wholesale cheese business, HT Webb, as it has not lived up to expectations. These factors resulted in costs of £36.5 million during the financial year.
Despite increasing oil prices, which created significant cost inflation for the dairy industry as a whole, Sir David believes that Arla Foods UK plc is well placed for the task as the rationalisation programme is proceeding ahead of schedule and because of the investments in Stourton, Manchester and Lockerbie in Scotland. The company’s investments for the financial year totalled £78 million.
Advances for the brands
Arla Foods UK plc succeeded in maintaining its market share during the summer’s elimination race among the multiples. Milk sales from supermarkets generally increased as doorstep sales declined.
Arla Foods UK plc increased sales of imported products such as Lurpak and Anchor by 4.8% and the category’s growth looks set to continue. For the Lurpak brand, which comprises both butter and blends, the overall turnover of £152 million represented an 11% increase on the year.
The branded fresh milk, Cravendale PurFiltre, continues to advance in the UK. The brand is now recording annual sales of over £60 million, which corresponds to 3.5% of liquid milk sales in the major multiple channel.
Sales of branded products such as Lurpak and Anchor increased during Arla Foods UK plc’s first 18 months. In contrast, the result was affected by costs connected with the company’s rationalisation programme.
Arla Foods is an international dairy company owned by 9,700 farmers from Denmark, Sweden, the UK, Germany, Belgium, Luxembourg and the Netherlands. Arla Foods is one of the leading players in the international dairy arena with well-known brands like Arla®, Lurpak®, Puck® and Castello®. Arla Foods is focused on providing good dairy nourishment from sustainable farming and operations and is also the world's largest manufacturer of organic dairy products.