Meadow Foods unveils expansion plans
MEADOW Foods, the UK’s leading independent dairy group, has announced a dip in profits but revealed plans to invest more than £2.5m in new production and storage facilities in Yorkshire.
The Chester-based company, currently led by former corporate financier Paul Deakin, said it would be improving its facilities in Yorkshire and Cheshire as part of a drive to make it more efficient by cutting transportation costs.
In the year to March 31 Meadow made a profit of £4m on turnover of £239m, and cut its borrowings. The “extreme volatility” of dairy markets was cited by the company for the fall in sales from £244m and profits from £5m.
Mr Deakin, who today revealed he would be stepping down as managing director but retaining a non-executive role, said: “Meadow has generated stable profits in a volatile dairy market and this has put the group into a strong position for the year ahead.
” We have lower borrowings than many of our competitors, a strong credit rating, and highly supportive shareholders and bankers. We will continue to invest in making our business as efficient as possible and will also look for further opportunities to grow by acquisition as the dairy sector rationalises.”
The £2.5m investment includes a proposal to build a new cold storage warehouse the Chester site, which will house butter and fat-based products that are used in food manufacturing by customers including Premier Foods, Burton and Bakkavor.
The majority of the company’s chilled storage is currently handled off site by a third party contractor. Investment in a new warehouse, which is subject to local planning permission, would enable Meadow to cut transportation costs and 100,000 road miles a year.
Capital expenditure in process control and raw material processing is also scheduled for the group’s sweetened dairy products manufacturing site in Holme-upon-Spalding Moor, Yorkshire.
Investments in new production facilities will allow Meadow to increase output and the range of products.
Meadow Foods said Norman Oldmeadow, one of the founders of the business, is to relinquish his executive role this month. He is also becoming a non-executive.
Simon Chantler, the company’s largest shareholder, is to become executive chairman.
He said: “Norman Oldmeadow and Paul Deakin have both made invaluable contributions to the group during their time with the business through their respective areas of specialist expertise.
“Norman has given the company unrivalled market understanding and a clear vision for growth and development. Paul, with his financial and management expertise, has restructured the company to give us a long-term platform for future stable profitability. I look forward to continuing working with them both in their new non-executive roles with the group.”
