The CEO of Arrabawn Co-op has said that the company’s strong performance in 2014, reflected by a €1.7m increase (60%) in operating profits to €4.4m, can be attributed to five years of significant capital investment now paying dividends.
Unveiling the company’s 2014 results, which were approved by its board last week, Conor Ryan said that last year’s performance was the co-op’s best yet and it is set for further gains in the year ahead.
Arrabawn’s €15.7m investment programme over the past five years, he said, is now starting to deliver vastly improved efficiencies, has significantly grown capacity and enabled it return one of the most competitive milk prices to suppliers in the country.
The current trading year, he said, would see the company improve its position again, thanks largely greater fuel efficiencies and capability to produce more value added products.
Operating margins in 2014 were at 2.08%, up from 1.26% in 2013. The improved performance of the co-op is best reflected in the almost tripling of operating profits since 2012. Profit before tax last year doubled on 2013, from €1.8m to €3.6m. Other results from 2014 that point to an extremely successful year for the business are:
- Gross profit was up by €2.5m (5%) to €48.5m
- EBITDA (earnings before interest, taxes, depreciation, and amortization) at €8m showed a €2m increase on 2013
- Net debt at year end is at €9.25m, down €880,000
- Retained profit was €3m, up from €1.4m
- Total capital and reserves have jumped from €37.5m to €41.9m
- Average milk price for the year was 38.27c/ltr
- 310 million litres of milk were processed in 2014, an 8% increase on the previous year
Ryan added: “Five years ago we acknowledged the ending of quota in 2015 and put an investment programme in place to ensure we had capacity for suppliers and a plant that delivered efficiencies and a more competitive milk price.
“Not only that, we have also focussed on developing products and reducing dependency on basic commodities. This was all aimed at delivering an improved return for our farmers and it is now coming to fruition, with space for further improvements still ahead.”
Arrabawn chairman Sean Monahan said: “The results just presented to the board show that the capital expenditure programme put in place over recent years has started to deliver real benefits. Some key strategic decisions have been made, which also include on the product development side, and this is delivering handsome rewards.
“There’s room for further gains and real reason for us to be optimistic for the future. The outlook for Arrabawn is very promising now, which is good news for our suppliers, shareholders and employees.”