Volac, the dairy nutrition company with its headquarters near Cambridge, has reported a 7% increase in sales from its latest full year’s trading. Profitability was unchanged after a steep rise in capital investment during the period.

The business made a pre-tax profit of £9.7 million on revenues of £212m in the year ended December 31st 2016, compared to £11.1m and £197m in 2015. It says the sales growth reflects volume growth, the weaker Sterling since June 2016 and the rise in dairy commodity prices in the second half of that year. The first full year of the Volac Wilmar Feed Ingredients joint venture established in 2015 saw the launch of the Mega Masterbrand range of dry feed fats to complement the Volac’s established Megalac products.

The year saw £36.8m invested in fixed assets, £11.0m or 43% up on 2015, with two major sustainable growth projects at Volac’s Felinfach milk processing and manufacturing site in Wales. There are the completion of a biomass-fuelled combined heat and power plant which started to produce clean, renewable energy during 2016; and the installation of a new spray dryer which is also commenced production in the period.

The company says this significant expenditure demonstrates its confident in the medium-term future of the business and the wider dairy industry. However, “the prospect of Brexit has introduced significant uncertainty to the environment for the near term”, despite the recent recovery in milk prices.

“2016 was a solid year for the business in a challenging environment,” states Volac chief executive James Neville. “Recent significant investment has left the business with high quality assets which will form the foundation of our future performance and growth. This includes our new biomass CHP plant at Felinfach, which was officially opened by HRH Prince of Wales in July 2017.

“During the coming months, we aim to play our part in preparing the UK dairy industry for a much more competitive environment due to the expected exposure to global competition post-Brexit.”