DAIRY FARMERS of Britain increased its turnover by 36% to almost £595m following the acquisition of Associated Co-operative Creameries last August, but the move has yet to boost profitability.
According to the dairy co-op’s preliminary results for the year ending Mar 31, 2004, group operating profit did rise 74% to £21.2m.
But most of this came from existing operations, driven mainly by milk sales, and an increase in members’ capital contributions.
New acquisitions in 2005, which included ACC’s five dairies and two creameries, contributed almost £2.2m but this was more than wiped out by a £3m loss at the Llangadog creamery, which has since been sold.
Overall, DFB’s processing activities just broke even during the year, but a spokesman for the business said this had been expected.
“We looked to buy the business because we knew we could improve it. Those efficiencies are starting to kick in now.”
Chairman Rob Knight said: “While we have continued to make huge progress in positioning ourselves well within the industry as a whole, the market remains very competitive and we need to respond to this to remain effective.”
To help fund the £75m purchase of ACC, members capital contributions doubled to 1p/litre.
After finance and reorganisation costs and taxation a £15.8m disposable surplus will be distributed to members’ investment accounts.