Offloading its loss-making Milk & More subsidiary saw Müller UK & Ireland take a hit of more than £65m, the dairy giant’s latest accounts have shown.
In an otherwise “strong” year of trading, the group, which sold the doorstep delivery service to Freshways in December 2023 for a nominal fee, saw sales rise by £102.1m to £2.4bn in the 12 months to 31 December 2023, according to its annual report posted at Companies House.
Operating profit also rose, with Müller swinging back into the black to hit £13.8m. It posted an operating loss of £5.9m in 2022.
Sales were boosted by record high farmgate milk prices, which drove retail prices upwards, alongside additional volumes for Müller Milk & Ingredients, driven by new supply contract wins.
The supplier also pointed to the positive performance of its Müller Yogurt & Desserts subsidiary, with revenue, operating profit and margin “all in growth versus the prior year”.
“Growth in 2023 shows that shoppers are not willing to compromise on the brands and the products they love,” the annual report read, despite ongoing cost of living challenges. The business also continued to invest in both marketing and capital expenditure “to fuel future growth, most notably with the launch of Müller Corner Originals and a new, multimillion-pound masterbrand TV campaign and brand refresh”.
One-off losses
However, the sale of Moreco Group (which traded as Milk & More) following a strategic review that concluded the business and its DTC focus no longer aligned with its core objectives, led to a one-off loss on the disposal of investments of £57.5m, alongside an impairment cost of £17.1m.
This contributed to a total loss for the financial year of £65.4m, up from a loss of £6.3m in 2022. However, Müller stressed the business, which has posted a number of big losses over the past 10 years, made a net profit when these costs were disregarded.
“The overall operating loss for 2023 does not accurately reflect the profitable performance of both Müller Milk & Ingredients and Müller Yogurt & Desserts,” said a spokesman for the dairy giant.
“Remove the one-off loss on the sale of investment of Moreco Group Limited and the LLP [Müller UK & Ireland group] was profitable in 2023,” he added.
“With a well invested network, a balanced business, healthy relationships with supplying farmers and those elected to represent them, as well as strong long-term strategic partnerships with retail partners, Müller UK & Ireland is set up to continue investing in the British dairy industry, while delivering further profitable growth.”
This position was reinforced by its acquisition of Yew Tree Dairy last June, Müller pointed out, in a deal it hopes will make it a major player in dairy ingredients.
Milk & More, which had been positioned by Müller as a premium offering, has since pivoted towards a more value-led proposition under its new owners Freshways.
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