Graham’s The Family Dairy profits hit in ‘fierce’ cost climate

Graham’s The Family Dairy has suffered a 28% slump in pre-tax profits amid one of its “fiercest” ever years for cost pressures, according to MD Robert Graham.

Scotland’s largest independent dairy supplier suffered a 28.7% drop in pre-tax profit to £1.6m, while operating profit fell 22.2%, revealed its accounts for the year to 31 March 2022, filed at Companies House.

But despite the “challenging” financial year, Graham’s saw turnover grow by £3.7m – 3% – to £126.9m, on the back of a “solid performance” across its core ranges and NPD growth.

Robert Graham said he had “never seen” such tough inflationary conditions in his three decades of working in the dairy indusry.

Rising costs in areas such as labour (with a big jump in driver and haulage costs), plus an increase in its milk price – which rose by more than 70% between February 2021 and August 2022 due to soaring on-farm inflation – had eaten into margins, he added.

The headwinds had continued into the current financial year, Graham told The Grocer. “We’ve been through the most challenging 15 months ever as a business by some distance, but I think calmer waters lie ahead.”

On the plus side, Graham’s – which now conducts about 45% of its business outside Scotland – has seen strong growth in demand for its protein range, particularly in its yoghurt tubes.

And as a result, Robert Graham stressed the business was “in the right space” to meet the growing demands of customers “around natural, provenance and protein”.