CREDITON Dairy Limited, the leading independent dairy drinks producer, has published its report and accounts for the year ended December 30, 2023. These demonstrate the business performed satisfactorily at a financial, commercial and operational level.

The reporting period was a challenging one for the dairy industry.

In the first half, global and domestic dairy markets remained weak due to lower consumer demand for dairy products and higher global milk production and as a result farmgate milk prices dropped sharply.

Crediton Dairy was not immune to these pressures but was conscious that on-farm costs remained high and so worked hard to minimise the reductions on its farmers.

At the same time, inflationary pressures, particularly in relation to energy and labour costs, continued to impact the business.

The second half of the year saw several weeks where milk production in Great Britain fell well behind the previous year but as markets started to firm milk production improved, helped perhaps by the prospects of improving farmgate prices.

Against this backdrop, the business performed well financially with turnover of £111.3 million broadly in line with the prior year (2022: £114.1 million). While, largely as a result of producing a higher volume and better mix of products, the business generated a profit for the financial period of £9 million (2022: £7.9 million).

During the year the business made a further £3.3 million capital investment to upgrade and expand its processing facilities.

This included improving its processing and filling capacity; the further scaling up of its utility services; and the creation of a new Head Office at the Dairy.

Having already invested some £36 million in developing the Dairy since the Management Buy Out in 2013, in the current year the business is investing a further £6.6 million.

This includes boosting further its processing capacity and capabilities, together with undertaking a major upgrade of its waste water treatment plant.

The results reflect the continuing strong sales performance and improved mix of the growing range of own label flavoured and functional milks and branded dairy drinks made at the Dairy.

The latter includes Arctic Coffee, which is now the No.2 iced coffee brand sold in British supermarkets; the fast-growing ProMlk range of fresh protein shakes; The Real Milkshake Company range of premium shakes; and the Moo branded range of flavoured and lactofree milks.

The branded portfolio made by Crediton Dairy was further expanded during the year with the launch of a new Biocol cholesterol lowering milk.  At the same time, the business also launched new ranges of customer impulse drinks and flavoured milks.

Commenting on the prospects for the business, Tim Smiddy, Crediton Dairy Managing Director said: “On the back of increasing demand for a growing portfolio of added value products supplied to UK retailers, Crediton Dairy is continuing to invest in its processing capacity and capabilities, site services and new product development.

“We continue to be positive about the long-term prospects for the dairy sector and the role that a focussed, added value, West Country business can play within it.”