Crediton sees profits jump on back of wider product range

Devon-based processor Crediton Dairy benefited from a wider product mix and strong sales to post a 14% increase in profits last year.

The added-value dairy supplier and owner of the Arctic Coffee and Moo milkshake brands saw profits after tax increase from £7.9m in 2022 to £9m in the year to 30 December 2023, its latest accounts showed.

Turnover of £111.3m was broadly in line with the previous year (£114.1m), in what Crediton described as “satisfactory” results.

This came despite the backdrop of “a challenging period” for Crediton, the processor said, citing weak dairy markets, low consumer demand and high production levels.

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

“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,” it added.

Crediton’s performance reflected higher sales volumes, a better mix of products and an “ongoing commitment to investing in enhancing the production capacity and capabilities of the dairy”, it said, pointing to a £3.3m capital investment to upgrade and expand its processing facilities during the accounting period.

Work 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.

Crediton has also spent a further £6.6m investment to boost processing capacity and capabilities this year, together with undertaking a major upgrade of its waste water treatment plant.

“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,” said MD Tim Smiddy.

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