Ornua Foods UK, the subsidiary business charged with the sale of Ornua’s stable of branded dairy products in the UK market, reported a pre-tax loss of £1m (€1.2m) for its 2016 financial year, which is an improvement on the £8m loss incurred the previous year.

Directors in Ornua Foods UK said they were disappointed the subsidiary had reported a loss for the second consecutive year, as restructuring costs and other charges affected the bottom line. While Ornua said sales volumes in the UK were stable, turnover for the year declined by close to a fifth (-17%) to £286m (€322m) as price deflation continued from the intense competition among UK retailers.

Improved cost control and efficiencies saw the business report operating profits of £631,000 (€710,000) for the year, leaving the business with an incredibly slender profit margin of 0.2%.

Ornua said its key cheese and butter brands in the UK market, Pilgrim’s Choice and Kerrygold, experienced growth in sales volumes, while own-label products for retail partners also saw volume growth. Pilgrim’s Choice is the number two cheddar brand in the UK, while Kerrygold is the fastest-growing branded butter in the UK by market share and sales volume.