Cornwall-based Trewithen Dairy has reported an 8% rise in sales to £56.3m in its latest accounts.
The company, which supplies a range of Cornish dairy products, from liquid milk to clotted cream, also generated pre-tax profits of £1.6m in the 12 months to 30 April 2021.
That was up 14.3% on the previous year, driven by the increase in sales, alongside “an improved sales mix and a continued focus on maintaining cost control”.
Trewithen also strengthened its balance sheet during the accounting period, with total net assets increasing by 18.7% to £7.6m. And at the same time, it was able to “maintain its commitment to supporting its dedicated group of local Cornish dairy farmers” with a milk price that remained “competitive throughout the year”, it said.
Meanwhile, the business shrugged off the challenges of the pandemic by undertaking a “number of strategic investments and initiatives which will provide a platform for future, longer term, growth and profitability improvement”.
This included a significant investment in its regional distribution capabilities through a dedicated new wholesale division Food & Dairy Ltd, alongside a complementary acquisition of Lillie Brothers, the Falmouth-based dairy produce supplier.
These actions would “provide a platform for future, longer term, growth and profitability improvement”, said Trewithen Dairy chairman Bill Clarke, who described the company’s performance as “satisfactory”.
It came despite the pandemic bringing with it “huge swings in consumer buying patterns putting pressure on range availability and customer service levels”, the supplier added.
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Trewithen also won significant new contracts, including a deal to supply Appleby Westward with Trewithen-branded milk and yoghurt to its network of more than 250 Spar stores across the wider South West – “building upon the already well-established trading relationship supplying branded clotted cream and butter”.
The accounting period also saw the business launch The Earth Milk sustainability project – which is focused on supporting initially two pathfinder Trewithen Dairy farmers to adopt innovative regenerative farming techniques to measure and improve their impacts on soil carbon retention, biodiversity and water quality.
Good progress had been made with all baseline measurements being completed under the project and initial insights being gained into the successes and failures of the regenerative practices being trialled, the supplier said.
The project was now targeting a 0.05% increase in soil carbon across the 1,700 acres of the two farms involved with a view to achieving net zero milk production at source.
Looking ahead, Clarke said the company was “having to address not only the ongoing challenges of Covid-19 but also the emergence of significant cost inflation, which is impacting on all aspects of the business”.
He added: “Although these strong headwinds impacted on profitability in the first half of the year, good progress is being made in recovering this in the second half.”
The business was “continuing to witness sales growth with volumes in particular being driven by a further significant expansion in fresh milk and clotted cream with a major retail customer”, he said.
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