Strategic Report Principal Activities
Risk Management
Dale Farm Cooperative Limited is a members’ voluntary cooperative registered under the Industrial and Provident Societies Acts (Northern Ireland) 1969 and 1976. The principal activities of the Group include manufacturing an extensive range of dairy products for the retail, food service and food ingredients sectors and marketing and distributing these products to both domestic and international markets. The Group also collects and markets members’ milk, supplies animal feed to farmers, and provides a range of other farm inputs and services.
The Board actively monitors and manages the risks it faces through an appropriate risk policy and risk register. The key risks which management face are detailed as follows:
Financial Performance The key performance indicators (“KPI”s) for the Group are: KPIs
2020 £000
2019 £000
Group turnover
504,528
509,363
Profit before taxation
9,772
12,007
Average milk price paid to members (pence per litre)
27.26
29.00
Group turnover decreased by 0.9%. The Group profit before tax decreased by £2,235k to £9,772k primarily reflecting weather related pressures on the United Feeds and ice cream divisions. The average milk price paid to NI members decreased by 1.74ppl (6%) in 2019/20 reflecting the lower dairy market returns during the year.
Operational Performance MILK SUPPLY
2020 Litres
2019 Litres
Average output per member
676,000
641,000
Sales Development The Group is committed to profitably growing its dairy processing business. Increases in sales volumes and dairy product returns resulted in the following growth in turnover:
TURNOVER GROWTH
2020 %
2019 %
Dale Farm Group
(0.9)
5.6
32
BUSINESS PERFORMANCE RISK The Group faces a number of business performance risks due to internal and external factors including competitive pressures in markets in which it operates. These risks have been identified and are managed through a number of measures: ensuring the appropriate management team is in place; business planning and regular forecasting; financial controls; key performance indicators; monthly reporting and timely corrective action when variances occur.
BUSINESS CONTINUITY RISK While there is a reliance on physical infrastructure, the Group operates 9 geographically autonomous production facilities, which helps mitigate business continuity risks. The Group also ensures that there is adequate knowledge throughout the management team and sufficient IT support and back up capability available should an unforeseen event occur. Management maintain and regularly update business continuity and IT disaster recovery plans and participate in industry-wide crisis management exercises.
BREXIT The current Brexit position remains uncertain. Where possible, we have taken steps to address any such areas by identifying and implementing solutions as applicable. Our plans are still active as the Brexit situation unfolds.
Annual Report 2019/20
