Tipperary Co-op has reported a 22% increase in turnover to €210m for the year ended 31 December 2017. Milk supply increased 6% from the co-op’s 400 milk suppliers. It processed 350m litres of milk and manufactured some 50,000t of dairy products during the year. Operating profit fell 8% to €2.9m as a result of paying a strong milk price, according to the co-op. Operating expenses increased €1m during the year, driven by a 2% increase in wages, along with increases in fuel and depreciation charges due to higher volumes of milk processed. Operating margins fell from 1.9% to 1.4%. The co-op paid a 0.4c/l bonus for all 2017 milk and invested a further €3.5m in capital during the year.
Tipperary Co-op has reported a 22% increase in turnover to €210m for the year ended 31 December 2017. Milk supply increased 6% from the co-op’s 400 milk suppliers. It processed 350m litres of milk and manufactured some 50,000t of dairy products during the year.
Operating profit fell 8% to €2.9m as a result of paying a strong milk price, according to the co-op. Operating expenses increased €1m during the year, driven by a 2% increase in wages, along with increases in fuel and depreciation charges due to higher volumes of milk processed. Operating margins fell from 1.9% to 1.4%. The co-op paid a 0.4c/l bonus for all 2017 milk and invested a further €3.5m in capital during the year.
Profit before tax decreased 26% to €1.8m. The co-op had net debt at year end of €17m, which was all working capital-related as the co-op has no long-term debt. Net asset value at year end was €36m.
Sales of butter increased 43% to €54.2m, mainly driven by prices. Butter sales accounted for 25% of total turnover. Cheese sales increased 31% to €75.9m. Sales in the retail division increased 5% to €21.5m.
Commenting at the co-op’s AGM, chief executive John Daly said the business performed well in 2017, “delivering a strongly competitive milk price for its milk suppliers”. He noted that the business made solid progress in both financial and operations terms, reflecting steady and confident growth.
He added that butterfat played a big part in underpinning and supporting milk price, reflecting well on the performance of the Kerrygold brand in international markets.
Tippagral, the co-op’s French subsidiary, delivered strong performance following an additional €4m investment in 2016. Tipperary is unique in the Irish dairy industry in that it doesn’t make cheddar, having focused on emmental cheese since the 1980s. This means the co-op is not exposed to any Brexit impact on cheese into the future.
Tippagral, which includes a cheese packaging, distribution and marketing business, complements its Irish cheese business. It commercialises a large volume of cheese produced in Tipperary while allowing the co-op to benefit from the sale of additional cheese varieties purchased for added-value resale from producers in Ireland and Europe.
Tipperary’s Co-op’s processed cheese subsidiary Fairgreen Ingredients also performed well. It provides cheese ingredients for a range of customers for inclusion in pizzas, readymade meals and for grating and slicing.
During the year, the co-op announced it was investing €30m in a 3.5t drier in Tipperary to manufacture higher value-added ingredients. The co-op is at maximum capacity and hopes to have this operational for next year.
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