Orwell, 04 October, 2019
Dairy nutrition company Volac has announced its financial results for the year ending 31 December 2018. Turnover for the calendar year was £241m, 10% lower than in 2017 (£269m), and loss after tax was £2.5m, down from £18.3m profit in the previous year.
James Neville, Volac Chief Executive summarised:
“2018 was a very challenging year for the business which experienced a combination of low prices in dairy markets and increased raw material costs. Whilst our outlook has improved in 2019 with improved market dynamics, our priority is to ensure continuity of supply to our customers in the UK, EU and Rest of the World, while the threat of disruption from Brexit remains firmly in place.
Despite our disappointing results, Volac has continued to invest heavily in 2018 for our future with over £20m being invested in a new purpose-built milk replacer finishing and packing facility near Kells, Ireland, a new feed fats factory in Gresik, Indonesia, and at Volac’s dairy processing factory in West Wales. The business intends to invest a similar amount in 2019, including the further redevelopment of our whey assets to better align to our future strategy.”
Key metrics for 2018 included:
Profit and Cash Flow
Loss after tax was £2.5m, down from £18.3m profit in the previous year which reflects a combination of low prices in dairy markets and increased raw material costs.
Increased Investment in Sustainable Growth
The Group invested £20.2m in fixed assets during the year. The main areas of spend were on our new Milk Replacer blending facility in Kells, Ireland, setting up a new animal fats production facility in Indonesia through our Volac Wilmar joint venture and the initial stage of investment in new capability at our Felinfach site.
Investment in 2019 will be at a similar level to 2018.
On 5th Sept 2019, Volac announced that the DMK Group and Volac intended to bring their successful joint participation in DV Nutrition to an end, subject to receiving relevant approvals.
Volac remains confident in the medium-term future of its business and the dairy industry, as demonstrated by its significant long-term investment programme. However, recent difficulties in the dairy industry and the prospect of Brexit has introduced significant uncertainty to the environment for the near term.
Andy Richardson, Head of Corporate Affairs