Arla Foods UK sees growth but warns of 'hard Brexit'

There are, however, external factors that could negatively impact Arla’s full year expectations
There are, however, external factors that could negatively impact Arla’s full year expectations

Arla Foods UK has announced revenue growth of 3 percent in the first half of 2019 thanks to decreased market volatility, but warns of the consequences of a 'hard Brexit'.

The dairy cooperative's half year results show a net revenue increase to £987m (€1.131bn).

Arla's milk price to its farmer suppliers also remained unchanged for the first six months of the year.

Reasons for growth include decreased market volatility, its transformation programme and a strong branded agenda, their report shows.



The co-op says its branded agenda played a strong role in increasing half year overall revenue by 3% compared to 2018.

Notable sub brand growth includes BoB (46%), Lactofree (6%), Organic (12%) and Arla Pro (48%) helping drive overall strategic branded revenue growth by 7%.



Natalie Knight, Group CFO said: “We have continued to build engagement and relevance of our brands through innovative products, brand activation and digital content.

“Consumers are pushing for more nourishing and sustainable food choices, which is why our intensified climate agenda will help increase both the understanding of our farmer owned cooperative model and our competitive advantage”.

Arla says the second half of the year will focus on delivering on full year targets 'while continuing to outperform peers'.

There are, however, external factors that could negatively impact Arla’s full year expectations.

The potential adverse consequences of a hard Brexit continues to be the co-op's biggest risk, along with the inherent volatility of the global milk markets.

With this in mind, Arla’s group revenue outlook for full year 2019 is expected to be EUR 10.2-10.6 billion.

Net profit share for 2019 is expected to be in the target range of 2.8-3.2 per cent of revenue.



It says a potential no-deal Brexit could 'negatively impact the outlook'.