Profit grows at Somerdale
Somerdale said it continued to perform strongly at a financial, commercial and operational level despite the unprecedented challenges of Covid-19, the UK leaving the European Union and the impact, for nearly all of the year, of retaliatory tariffs imposed on British cheese entering the US market.
At the same time, Somerdale said it also continued to invest in: reinforcing its operational capabilities; growing its presence in core and emerging markets, and; developing further product portfolio of British cheeses.
Trading conditions were good for the majority of the year with the Covid-19 pandemic only having a limited negative impact. In most markets, Somerdale said it benefited from a surge in demand as lockdown restrictions led to more home cooking and entertaining at home, which resulted in consumers purchasing more Somerdale products through its retail distribution channels.
In the current financial year, Somerdale said it is continuing to perform well despite a significant increase in freight and packaging costs, restricted shipping container availability and labor shortages.
Highlights for the year included turnover increasing by £3.8m ($5m) to £45.8m/$60.5m (2020: £42m/$55.5m); and US sales reaching a record $25.9m, up 3% year-on-year.
Profit before tax increased to £1.78m/$2.35m (2020: £605,000/$800,000), while net assets increased to £2.8m ($3.7m) and current assets grew to just over £2m ($2.6m).
In the last quarter of the financial year, Somerdale acquired the blended cheese business of Abergavenny Fine Foods (AFF). This included the transfer to Somerdale of AFF’s blended cheese processing assets, brands and associated trademarks.
Trevor Debenham, finance director of Somerdale International, said, “During the 2020/21 financial year the business continued to perform strongly. Turnover and profitability both grew, helped in no small part by record sales in the US – our largest and most important market.
“In response to Covid-19, Somerdale continued to prioritize the health and safety of our staff while at the same time building as much resilience as possible into our supply chains. Indeed, thanks to the commitment of our staff, allied with the close collaboration and support of our customers and supply partners, we were able to handle the surge in retail demand while still maintaining our customer service, product quality, and availability levels throughout.
“Looking forward, the directors expect a strong trading performance in the current year and beyond. Central to this will be Somerdale’s flexibility and agility in reacting to new opportunities & risks and our ongoing commitment to investing in and enhancing our operational capabilities, in-market presence, product range and marketing activity. While, the removal from March 2021 of retaliatory tariffs on British cheese entering the US market is a further positive development as this improves the competitiveness of UK products and should support further sales growth.”
