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First Milk announces solid trading results for ‘transformed’ business

But NFU Scotland said more can be done to build trust and improve genuine communications

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First Milk announces solid trading results for ‘transformed’ business

First Milk has announced its annual results which show a ‘solid trading performance from a transformed business.

 

Net profit for the year ended March 31 2017 was £6m, following a £5.1m loss in 2016, with a 9ppl average increase in member milk price, including a 2ppl business performance supplement.


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Results

  • Operating profit, before exceptional items: £11.7m (2016: £6.0m)
  • Net profit: £6.0m (2016: loss £5.1m)
  • Group turnover: £206.5m (2016: £294.2m)
  • Net bank borrowings: £37.6m (2016: £32.1m)
  • Capital investment: £3.8m across all sites (2016: £4.8m)
  • Total group capital and reserves: (2016: £17.4m)
  • 9ppl average increase in member milk price, including 2ppl Business Performance Supplement

Chairman Clive Sharp said the business had ‘transformed’ over the past two years. Highlights for the year included a new long term supply contract to Nestle UK and Ireland, a long-term cheese supply partnership with Tesco and Ornua Foods and the appointment of Shelagh Hancock as chief executive.

 

“The transformation of our business is complete and, as a result, First Milk today is now a more focused and financially secure business,” he said.

 

Improvement

 

“This is demonstrated through these significantly improved financial results and, most importantly, through our ability to increase milk prices to our farmer members ahead of the market during the last financial year.

 

“I want to take this opportunity to thank all of the staff of First Milk, my fellow Board directors and, above all, our members for their hard work and commitment during the last year.”

 

George Jamieson, NFU Scotland milk policy manager, said the results were ‘very encouraging and acknowleged the ‘huge sacrifices’ made by members.

 

Sacrifice

 

“The low prices First Milk members received over the recent difficult market conditions were amplified by the very poor financial position the co-op was in.”

 

He called on the co-op to do more to build trust and ‘improve genuine communications’.

 

“We believe there is a need, and a great deal of sense in increasing members understanding of governance and members responsibilities, measured not just by attendance and engagement with meetings and the AGM, but also building a culture of co-operation.”

 

Chief executive Shelagh Hancock, who joined the business in late March, said it had build a financially stable foundation to build from and must now look to the future.

“Working as one team, we will continue our relentless focus on efficiency and quality,” he said.

 

“We will put customers at the heart of our business, creating value through strong, long-term partnerships and exploit the advantages we have to grow the business.

 

“The combination of these efforts is to deliver competitive total returns to our members.


She added she believed First Milk had a bright future.

 

Brexit

 

Mr Sharp added the Brexit vote in June 2016 had created considerable political and economic uncertainty but its focus on the UK market and British provenance of our milk put it in a strong position.

 

“We believe that the role for a scale British Dairy Co-operative is even more compelling post Brexit and we aim to demonstrate this in the years ahead,” he added.

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