Brexit uncertainty hits Arla’s profits during a ‘turbulent year’

Arla Foods, which employs around 1,000 staff in Leeds and produces Anchor butter, Lurpak and Cravendale milk, has said it “strived to protect” the company’s profitability throughout 2017 given volatile market conditions brought about by Brexit.

The company, which saw pre-tax profits fall to £15.4m in the year to December  31 2017 from £23.3m the year before, blamed the weak GBP, which it said was a consequence of Brexit challenging its profitability.

“We continue to develop robust plans to deal with the eventual outcome of the Brexit negotiation,” Arla said.

Turnover, however, was up, rising from £2.43bn in 2016 to £2.53bn last year.

Arla called 2017 a “turbulent year” for the dairy industry, which started with a significant raw milk shortage – a reaction to low market prices in 2016.

The group said it used the year to focus on driving its long term strategy, strong branded growth and major investment in innovation.

In February, Arla Foods announced plans to acquire Yeo Valley Dairies, a subsidiary of the Yeo Valley Group, in a multi-million-pound deal.

The deal will give the company the rights to use the Yeo Valley brand in milk, butter, spreads and cheese under an intellectual property licence with Yeo Valley.

Completion of the transaction will take place following merger approval by the Competition and Markets Authority.

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