Revenue has increased by five per cent and profits have improved by $16.9 million in Bega's 2019/20 financial results, despite the dairy industry suffering through drought, bushfires and now the impacts of the coronavirus.
Revenue in 2018/19 was $1.42 billion, which increased to $1.49 billion in the last 12 months, while profits increased from just $4.4 million to $21.3 million.
Bega Cheese executive chairman Barry Irvin said the company's diversified dairy and food business and regional milk procurement model were key to managing through the issues the industry has faced.
“I am particularly proud of this year's business performance given the circumstances we faced, our values and culture always comes to the fore in challenging times,” he said.
Bega Cheese reported strong growth in its export business, continued growth in the domestic grocery business, particularly across the core spreads category along with the launch of a number of new products including a honey range.
The increase in its domestic grocery business was helped along by panic buying and reduced promotional spending.
The company's net working capital and net debt both reduced by just over $50 million each, with an increased focus on accounts receivable and inventory management the reasons for the $56.3 million drop in working capital.
Looking forward, the report said milk supply was expected to increase in the 2020/21 financial year and future growth will be underpinned by ongoing innovation in their product range and branded foods portfolio.
“It has been important to ensure we remain focused on both managing the challenges of the current year and in addition, we continue to build the business for future success,” Bega's chief executive officer Paul van Heerwaarden said.
“The strong cash generation and associated debt reduction combined with a successful process improvement program positions us well.
“We have continued to invest in new products, markets, technology, infrastructure and our people, all of which will contribute to the success of the business in future years.”