Pilgrims Choice

Source: Ornua Foods UK 

The UK arm of Irish dairy co-op Ornua said the 40% drop in pre-tax profits was due to a major investment in operations

Pilgrims Choice owner Ornua Foods UK saw revenues grow by 10% to £354m for the 12 months to 31 December, however, pre-tax profits fell by almost 40%, from £6.8m in 2018 to £4.1m, latest accounts have shown.

The UK arm of Irish dairy co-op Ornua said profitability fell due to investment in a “significant business transformation programme” that would ultimately be rolled out across its global business.

However, the investment in new cutting and packing technology, IT systems, better governance and standardised ways of working also gave it “best in class” operations that would be instrumental in driving future efficiencies and economies of scale for the business, said MD Bill Hunter.

He stressed “the underlying performance of the business was good, and we are satisfied”. Sales volumes also grew by 10%.

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2019 also saw reduced returns from traded commodities, which were largely offset by a strong underlying performance in the core business, driven by “a better customer mix, branded sales and an ongoing focus on rigorous cost control and efficiencies”, Ornua said.

The full year effect of several new business wins in 2019 and the capital investment programmes undertaken was expected to be reflected in future years, it added. Ornua would also continue to invest heavily in multi-channel marketing campaigns for both the Pilgrims Choice and Kerrygold brands.

Hunter said the supplier had undertaken a “huge response” to the coronavirus pandemic to keep staff safe, supply chains operational and service and quality levels high for customers.

The supplier also planned to continue shipping Irish cheese to the UK earlier than usual in order to mitigate any potential Brexit-linked disruption. “We’re not bringing more cheese over, we’re just bringing it to the UK earlier and maturing it in the UK,” Hunter stressed.

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“In the light of Covid-19 our key focus has been to do everything we can to ensure the health and wellbeing of our staff,” he added.

“At the same time, we have taken steps to build as much resilience as possible into our business operations and supply chain, and to date, demand for our core retail cheese and butter lines has been strong.”

Ornua’s UK results come three months after its reported global revenues climbed by 11.5% to reach €2.3bn for the 2019 financial year, helping Kerrygold become a €1bn brand. The dairy co-op has also recently announced plans to invest $10m in its Ornua Ingredients North America division to upgrade its Hilbert, Wisconsin cheese ingredients operation.