Market Drayton-based Muller's sales close to £2 billion after takeover
Dairy giant Muller raked in almost £2 billion of sales last year as brought the newly-acquired Dairy Crest dairies business into its fold.
That takeover deal meant the Market Drayton-based yoghurt maker grew revenues by almost 50 per cent, but the process of combining the businesses also led to falling profits.
Sales clocked in at £1.98 billion, while losses grew from £106 million to £114 million. The company also said it had continued to look for cost-cutting measures as milk prices continued to dwindle throughout 2016.
In a report accompanying the newly-published accounts, the company said: "Trading in the liquid milk market has continued to be challenging due to intense competition from both national and local milk processors.
"The business' focus has remained on identifying cost reduction activities within our supply chain and delivering these in a professional manner, whilst exploiting synergies following the acquisition of the Dairy Crest dairies division."
It added: "Following the acquisition of Dairy Crest dairies division, one-off costs have been incurred integrating operations, processes and systems of the newly acquired business.
"This work is ongoing and is expected to be completed during 2017. This has been a primary reason why operating profit. The acquisition is also the main reason behind revenue increasing."
The losses are actually something of a red herring, as they include the effect of amortisation on the business – which involves the devaluation of assets on the balance sheet.
Operating profits excluding the effect of this fell from £73 million to £51 million.
The number of staff on the company's books also increased significantly over the year, probably because of the Dairy Crest deal.
The average number of employees within the business grew from 4,979 in 2015 to 7,817 last year, with the cost in wages, pensions and taxes also spiralling, from £176 million to £303 million.
Muller recently announced plans to significantly grow sales of yoghurts and desserts, with 208 million of its products currently flying off the shelves. Sales from yoghurts remained steady at just over £393 million in 2016.
It now intends to use a £100 million investment in marketing and production across its Shropshire sites to grow sales.
