West Country-based dairy exporter Somerdale International saw sales and profit fall slightly in its most recent accounting period, following a return to pre-pandemic trading conditions.
The exporter saw turnover fall by 3.4% to £44.3m in the year to 31 March. Operating profit and pre-tax profit, meanwhile, fell by 13% and 12.2% to £1.7m and £1.6m respectively, according to the company’s annual report and accounts, posted at Companies House.
The company explained its results were “in line with expectations, reflecting the unwinding of the positive Covid-19 pandemic market impacts seen in the prior year”, and a return to more typical levels of demand from its customers globally.
But while sales had reduced, on a two-year basis, they had grown by 5%, Somerdale stressed, and areas such as its North American business performed strongly, with revenues climbing by 11% year on year to £26m.
The company’s net assets also increased to £3m, up from £2.8m the previous year.
However, the second half of the year saw the company experience availability issues affecting product, freight and labour, which led to rising input costs.
Distribution costs were particularly affected and rose by 64.9% from the previous year to £3.7m. This was explained by Somerdale as being caused by “the rebound of global economic demand post-pandemic led to a shortage in freight container availability and as a consequence major price increases”.
FD Trevor Debenham said: “In the current financial year, trading remains strong, with full-year sales growth expected to be generated from most markets. Rising inflation has reduced margins, but profitability is on target for the year.”
He added the company remains “optimistic” and that it anticipates growth in the coming years. It invested in a new state-of-the-art warehouse facility in May 2022 to provide additional storage capacity to support sales growth.
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