Record profits at Lakeland Dairies

Northern Ireland’s largest milk processor, Lakeland Dairies, continues to consolidate following the LacPatrick merger, with operating profits for the year to 26 December 2020 up 27% to a new record high of £23.48m.

Turnover was also at a new high, increasing 5.7% to end the year at £985m. Operating profit margin has widened out from 2% in 2019 to 2.4% in 2020.

While the COVID-19 pandemic meant Lakeland’s Food Service business based in Newtownards had a challenging year with revenues down 24%, CEO Michael Hanley maintains that other parts of the business performed strongly. Food ingredients remains the mainstay, with 250,000t of butter and powder produced. It accounted for 63% of total turnover in 2020, up from 56% in 2019.

In just seven years, Lakeland has doubled its turnover, and more than doubled its milk pool, mainly due to the acquisition of the Fane Valley dairy business in 2016 and the LacPatrick merger in 2019.

In 2020, the co-op processed 1.9bn litres of milk, of which 1.05bn litres (55%) was produced by approximately 1,200 farmers in NI.

The 2019 merger did see Lakeland take on more debt, with the 2019 accounts showing a net debt figure of €107.5m, compared to around €60m at the end of 2017.

However, in 2020, the co-op managed to pay down a significant chunk, leaving it at €87.7m at year end.

According to Michael Hanley, capital expenditure continued across all eight Lakeland processing sites in 2020, with the highest spend at Artigarvan in Co Tyrone as Lakeland look to “unleash the processing capacity and efficiency identified pre-merger”.

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Lakeland Dairies consolidate post-merger

Lakeland-LacPatrick merger formally completed