Ornua Foods UK reports strong performance with turnover up 16%

Ornua Foods UK, the UK’s largest supplier of retail packed cheese, today (3 August 2021) published its operating and financial results for year ended 26 December 2020 with turnover up 16.1% to £411 million. Pre-tax profits grew by 26.8% to £5.2 million reflecting strong underlying business growth, the impact of the change in consumer behaviour in response to Covid-19 and favourable commodity price movements. This performance was achieved against a backdrop of a complex trading environment dominated by the global pandemic and Brexit.

Ornua Foods UK’s branded and own-label portfolio of cheese and butter benefitted from the change in consumer behaviour with lockdowns giving rise to a renaissance in home cooking as consumers, with an increased focus on health and wellbeing, navigated towards natural, nutritious foods from brands they could trust. However, profitability was impacted by an increase in costs as the business put in place Covid-19 safety measures across its operations and met increased consumer demand with extended operating times.

The company had net assets of £38.4 million, up 7.6% at the balance sheet date.

Investment in state-of-the-art technology; brands and packaging innovation

Ornua Foods UK continued to invest in state-of-the-art cutting and packing equipment at its facility in Leek including the installation of an additional high-speed cheese slicing line and further expansion of its cheese grating capabilities. This delivered an additional 7,000MT of capacity bringing total annual production to over 110,000MT, reinforcing its position as the largest and most efficient cheese packing facility in the UK. In addition, the business continued to invest heavily in multi-channel marketing campaigns for both its Pilgrims Choice and Kerrygold brands.

Pilgrims Choice is the clear No. 2 branded cheddar in the UK and was supported by the introduction of Megablock, a simple but innovative new packaging solution delivering a saving of 40% of plastic per pack, and continued investment in highly creative and disruptive multi-channel advertising. Kerrygold, the No.3 block butter brand in the UK, occupies a premium position in the market. During the year it benefitted from a return to British TV screens for the first time in four years as part of a new multimedia advertising campaign reaching over four million UK butter lovers reinforcing Kerrygold’s superior taste, Irish provenance, and grass-fed credentials.

Post-Brexit transition period

The UK left the EU at the end of January 2020 and in the post-transition period following Brexit, Ornua Foods UK worked closely with customers to ensure security of supply and undertook a range of strategic measures to minimise any potential negative impact. Central to this was putting in place contingency stock storage in the UK, developing tailored customer stock requirement plans, and the maintaining of a rigorous focus on production efficiency, product quality, customer service, and new product development to secure Ornua Foods UK as a supplier of choice in the UK market.

Covid-19

The global pandemic has had a major impact on both public health and the wider economy. In response to Covid-19, Ornua Foods UK continues to prioritise keeping its people safe and continuing to serve its customers by building as much resilience as possible into its supply chain to continue to mitigate against any potential disruption.

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 has been able to meet demand, maintaining high levels of customer service, quality, and availability.

Commenting on the 2020 results, Bill Hunter, managing director of Ornua Foods UK said: “Ornua Foods UK had a strong year with pre-tax profits up 26%, despite the significant challenges presented by the global pandemic and the post-Brexit transition. The key fundamentals of our business, namely great people, products, and partners, came to the fore as we all worked together to keep high quality food on supermarket shelves across Britain. I’m 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 were able to meet the surge in demand in retail while maintaining our customer service, product quality, and availability levels throughout.

“Looking ahead, our long-term strategic focus is 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. This, together with 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.”

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