Somerdale International Limited (Somerdale) has published its report and accounts for the year ended 31st March 2022. The results were in line with expectations reflecting the unwinding of the positive Covid-19 pandemic market impacts seen in the prior year.
Trading conditions were mixed for the majority of the year, as many of the market impacts relating to the Covid-19 pandemic unwound. In particular, in some markets, the reversal of Covid-19 factors led to a reduction in sales, as consumers returned to normal buying habits. This return to more typical levels of demand led to a sales decline, in sterling terms, of -3% for the year. However, on a two-year basis, the sales growth was +5%, in line with the long term aims of the business.
During the year, the companys North American business achieved record sales with growth of +11%, further cementing its position as the leading supplier of British cheese to the United States.
During the second half of the year, the business experienced availability issues affecting product, freight and labour, which in turn led to input costs rising significantly through the end of 2021 and into 2022. In particular, the cost of distribution surged, as the rebound in global economic demand post the pandemic led to a shortage in freight container availability and as a consequence major price increases. While, in the last quarter, the business started to see an uplift in the cost of cheese, and the milk used to make it, as the Ukraine war started to have a major impact on farm-input costs particularly in relation to feed, fertiliser and fuel.
Said Trevor Debenham, Finance Director, Somerdale International: “During the 2021/22 financial year the business performed in line with expectations. The return to more typical levels of consumer demand, as the impact of the Covid-19 lockdowns unwound, led to a sales decline of -3% for the year. However, on a two-year basis, the sales growth was +5%, in line with the long term aims of the business. Importantly, we continued to perform strongly in the US market with record sales of $29 million reinforcing our position as the leading supplier of British cheese to the North American market. “In the current financial year, trading remains strong with full year sales growth expected to be generated from most markets. Rising inflation has reduced margins, but profitability is on target for the year. We remain optimistic about the long term prospects for the export of high quality British dairy products as demonstrated by our plan to invest in the development of a new state-of-the-art warehouse facility which will support Somerdale’s sales growth for the next decade and beyond.” For more visit somerdale.com/