It is my privilege as Chairman to present to you the annual report for 2024. Despite the challenges of a very difficult start to the year due to the inclement weather, I am happy to report that the Society achieved strong growth and excellent results in all departments. At year end, the Board were in a position to approve generous bonuses to our milk suppliers and customers to reflect the strong trading performance.
Financial performance:
Overall turnover in the year increased by 7.9% to over €203 million, with operating profit (before trade bonuses) up 5.1%. Creamery turnover was up 13.7% with price recovering in the second half of the year. Mill volumes reflected the challenging weather conditions and finished the year 16.3% greater than 2023. In contrast, the value of mill turnover fell by 1.1% with average prices lower than 2023. Fertilizer volumes increased by 17.7% on 2023 with average prices lower by 23.3%; all other turnover in the stores increased by 2.8% with margins softening.
The pharmacy division reports a 14% increase in turnover, with 65% of this accounted for by a first full year’s trade in Ballineen.
In addition to both Carbery’s milk price support of 5.0 cents per litre already paid on March milk, and the feed rebate provided on January to April purchases, the Board was pleased to be able to announce an end of year trade bonus package of €3.2M – increasing the total Drinagh 2024 amounts by 10.8% on those for 2023.
Carbery reported excellent results. Dairy markets were marked by global demand fluctuations and persistent cost pressures. There was a good performance in its Nutrition Division delivered through new customers and a focus on innovation and a strong performance in its Taste Division achieved through increased consumer demand with a focus on delivering on its growth potential balanced with meeting the highest standards. Group turnover was up 8.4% on 2023 and operating profit was up by 26.8%. Carbery was able to draw on the €1.3M balance in the stability fund set aside in prior years to support the milk price early in 2024 and it was also able to increase this fund by the end of 2024 by setting aside €8.6M for future years.
Our investment portfolio contributed positively to 2024 group profit with equity markets delivering double digit returns. Drinlis continued to invest in the growth potential in short term and long term workspace solutions reflected in the first market value increase in the Clonakilty property since 2020. Shinagh Estates reported a 4.8% increase in turnover and a 30.7% increase in operating profit on 2023.
Creamery:
Milk supply for the year reduced by 1.35 million litres to just over 210.6 million litres. Supplies for the first half of the year were back around 5%, due to a very wet March/April and a May/June with low grass growth rates. A weather support package of 5.0 cents per litre plus vat was paid on all March milk supplies in recognition of the difficulties facing farmers during the spring. However, a good backend saw milk supplies recover and allowed some reprieve on farm after a tough year.
A total of €1.73 million in FutureProof bonus payments were paid to suppliers to encourage the use of more sustainable practices on farm.
In 2024, we asked suppliers to complete a survey on their future plans. We had an excellent response with over 80% of Drinagh milk suppliers making a submission. Giving Carbery an insight into supplier’s plans provides vital information on how best to plan and prepare their business for the coming years too. The survey also provided feedback on key areas such as succession and the potential impact of changes to our current nitrates derogation.
Bovine Tuberculosis (TB) continues to be a significant issue in the Drinagh Co-op catchment area, with high TB reactor numbers both in 2023 and 2024. The toll that this disease can have on both the farm business and on farm families cannot be underestimated.
The Society congratulates Jason Wolfe, Stouke, Ballydehob who was the Drinagh winner at the Carbery Milk Quality and Sustainability Awards. Congratulations also to Oliver and Sheila Lynch, Coolnaclehy, Skibbereen who were finalists at the NDC and Kerrygold Quality Milk Awards during the year.
The Board approved a bonus of 1.0 cent per litre on 2024 milk supplies at year end. The average price paid on 2024 milk supplies was 53.50 cents per litre after levies and charges and including VAT.
Stores:
The stores division continues to perform strongly. Substantial capital expenditure projects were approved for the Skibbereen Hardware and Bantry Farm Center stores. Re-development works were also approved for the Dunmanway and Aughadown outlets. At year end the Board approved a €15 per tonne rebate on fertilizer purchases for 2024. This was in addition to the €100 per tonne rebate approved for our beef and sheep farmers for the purchase of protected urea products to encourage the adoption of emission reducing technologies on farm.
Mill:
Mill throughput increased substantially to almost 100,000 tonnes for the year. The combination of a very wet Spring where stock were housed until mid April combined with a rising milk price and favourable grazing conditions at year end led to this record tonnage. Raw material prices eased throughout the year which allowed us to decrease feed prices to our customers as the year progressed.
The Board approved a rebate of €15 per tonne on ruminant compound feeds from January to April to help reduce the costs to our customers resulting from the poor spring weather. In addition, at year end the Board approved a bonus of €12 per tonne on all ruminant feed purchases as well as bonuses for other categories of feed similar to prior years.
Pharmacies:
The year marked the first full year trading of Scannell’s Pharmacy, Ballineen in the Society’s pharmacy division. A re-branding to Drinagh Pharmacy Ballineen took place in September. The Board approved a re-development of the Skibbereen pharmacy which included the purchase of a robot to improve efficiencies. This project was completed recently and will strengthen our position in the sector.
On behalf of the Board, I would like to thank the management and staff for their continued hard work and commitment to the Society. The Co-Op has gone from strength to strength over the last number of years due to their dedication.
The year represents my own final year on the Board. Sincere thanks to my fellow Board members for their efforts throughout the year and for their support and collaboration with me over the last four years as Chairman. I wish the Society well in the years ahead.
A special word of thanks to Mr. Michael John O’Donovan who is also retiring from the Board. I welcome Mrs. Mary Hayes and Mr. Bryan Holmes to the Board and wish them well in their terms in office.
Finally I want to thank our shareholders, milk suppliers and customers for their continued loyalty to the Society.
Donal McCarthy
Chairman
Attachments: