It was the second highest payout in Tatua’s 106-year history, only 30c behind the centenary $9.
Despite the summer drought in Waikato and some covid-19 disruptions to trading, Tatua made a record revenue of $381m (up from $364m in 2019) and a gross margin for earnings of 40%, or $151m.
Divided by the 15.15m/kg supplied by shareholders, group earnings were $9.96/kg before retention and taxation, some 30c higher than the previous year.
Chief executive Brendhan Greaney says the results had been achieved by a massive commitment across the whole group, 107 supply farms and 370 employees, fewer than 20 of whom are located overseas.
“The wide diversification of our markets played a huge part in our trading success during the covid-19 year, because we are not overly reliant on one market or one product,” he said.
Members of the marketing team had at times helped load containers and the new head of the China office was prevented from taking up his position and used modern technology instead.
“We acknowledge the hardship faced by many businesses and individuals as a result of the virus and know we are fortunate to be part of an industry that has continued to operate in the covid-19 environment,” Tatua said in a company statement signed by Greaney and chair Stephen Allen.
Gearing (debt to debt plus members funds) fell from 27% to 24% at the July 31 balance date.
With the luxury as a co-op to withhold 12.5% of its earnings, Tatua spent $20m on wastewater treatment and engineering support services.
Greaney says there was a long list of maintenance projects and new plant equipment on which to spend future retentions.
Speaking after a suppliers’ meeting, he says farmers were happy with the payout and retention level in what were challenging times, for which they credited the strength of the Tatua team.
There were no plans to expand the collection area of about 10,000ha or admit new members because Tatua was focused on adding value to the 170m litres of milk it collected.
“What we have, makes sense for this company – we are not in the business of processing more and more milk,” he said.
About half of Tatua’s processing plant takes raw milk and makes caseinates, whey proteins and anhydrous milk fat.
The other half takes some of those specialised ingredients, along with additional procured inputs, to make higher-value products.
“Essentially, to continue to grow the value-add products we don’t need more milk,” he said.
