Ornua reports satisfactory financial performance with turnover up 10%
Ornua Foods UK, the UK’s largest supplier of British and Irish cheese, has published its operating and financial results for year ended 2019.
Ornua reported a satisfactory trading performance with turnover up by 10% reaching £354 million, corresponding to a sales volume increase of 10%. This, according to the business, reflected its commitment to following a clear and consistent strategy to deliver stability in what continues to be a highly challenging and volatile market environment. Business strategy focused on driving continuous improvement, delivering best in class category expertise and support to customers, building a strong own-label and branded product portfolio and optimising experience in dairy commodities.
The results for the company show a pre-tax profit of £4.1 million (2018: £6.8 million). 2019 saw investment in a significant business transformation programme, which led to a reduction in profit for the year but which the company says will be instrumental in driving future efficiencies and economies of scale. 2019 also saw reduced returns from traded commodities, which were largely offset by a strong underlying performance in the core business. The latter reportedly being driven by a better customer mix, branded sales and an ongoing focus on rigorous cost control and efficiencies. The full year effect of several new business wins in 2019 and the capital investment programmes undertaken is expected to be reflected in future years.
The company has net assets of £35.7 million, up 12.3% at the balance sheet date.
During 2019, the company continued to make a strong level of investment in capital expenditure and marketing. Capital expenditure included further investment in industry leading cheese cutting and packing technology and a strategic investment in a significant systems upgrade. In addition, the business continued to invest heavily in multi-channel marketing campaigns for both its Pilgrims Choice and Kerrygold brands. A new creative execution of Pilgrims Choice’s ‘The Cheese of Your Dreams’ TV and online advertising campaign was successfully undertaken during the year. This reportedly generated a high level of consumer engagement and helped reinforce Pilgrim Choice’s position as the clear No.2 Cheddar brand in the UK.
Commenting on the 2019 results, Bill Hunter, managing director of Ornua Foods UK, said: “The 2019 financial results reflect a strong underlying performance in our core business. This was driven by a better customer mix, branded sales and an ongoing focus on rigorous cost control and efficiencies. While the full year effect of several new business wins secured in 2019 and the major investment made during the year in a business transformation programme will be reflected in future years.
“Looking forward, we believe that our ongoing investment in both our state-of-the-art packing facility in Leek and our Pilgrims Choice and Kerrygold brands will continue to give the company a competitive advantage in the marketplace.”
Post the year end, the new financial year has witnessed the Covid-19 pandemic which is having a major impact on both public health and the wider economy. Ornua says that its number one priority is doing everything it can to ensure the health and wellbeing of its staff while at the same time, ensuring as much resilience as possible in its business and supply chain to mitigate against potential disruption.
Operationally, Ornua says its biggest challenge is to keep its supply chain operating to ensure markets remain open to serve its customers at a time of great uncertainty. The demand for core retail customer cheese and butter lines has been strong and, despite the significant challenges that Covid-19 has presented to all in the supply chain, the business reports that it has been able to maintain its service and quality levels.
Commenting on post year-end trading and the impact of Covid-19, Hunter added: “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. At the same time, we have taken steps to build as much resilience as possible into our business operations and supply chain. To date, demand for our core retail cheese and butter lines has been strong. I’m also pleased to be able to report that, thanks to the hard work and commitment of our staff, allied with the close collaboration and support of our customers and supply partners, we have been able to maintain our service and quality levels.”