A leading Scottish cheese maker has blamed a challenging trading environment for a three-fold increase in pre-tax losses.
Lactalis McLelland, which owns the Orkney, Galloway and Seriously Strong cheddar brands, posted a pre-tax loss of £16.378million for the year ended December 31, 2015. Pre-tax losses in the year before were £3.825million.
Accounts filed with Companies House reveal the company experienced a 7.5% drop in turnover for the year to £186.735million, from £201.861million previously.
The bulk of sales were in the UK, with £19.874million to Europe and £3.121million to the rest of the world.
In his statement accompanying the accounts, company director Mark Taylor said: “The year has been difficult due to the challenging trading environment with the market for dairy products remaining highly competitive. Milk price fluctuations have led to falling stock value of cheese and falling market price for cheddar manufactured at high milk price which have been in storage for over 12 months.”
He said the branded cheddar market had continued to be extremely competitive in 2015 and despite the difficulty in transferring the input cost for cheese to customers, the business had continued to support the Seriously Strong brand, with promotions and marketing investments.
“Our main continental brands, President and Galbani, performed well and delivered category growth in 2015. Our organic milk, Rachel’s, also performed well with increased volume, and market shares,” added Mr Taylor.
He said the key business risk affecting the company was its ability to recover costs from its customers.
“Key focus for 2016 will be to continue investing in people, manufacturing efficiencies, brands, products and process innovation,” added Mr Taylor.
“Good progress has already been made in these areas with benefits beginning to accrue to the business.”
The accounts also revealed that the company, which employed an average of 381 people in the year, paid its highest paid director £258,000. This is up from £209,000 in 2014.
