FDBusiness.com

First Milk has returned to the black in the year ended March 31st 2010 with a positive £10.3m swing in pre-tax profitability to end the year with a profit of £0.4m as the UK dairy co-operative systematically reduced its cost base and improved efficiencies throughout the business. Group turnover declined 8% to £536m, reflecting the decision to move away from several low margin cheese contracts.

A range of efficiency savings and better market returns has allowed First Milk to fund a number of increases in members’ milk price.

Net bank debt reduced by £10.7m compared to 2008/09 and was £69m at year end against a total facility of £130m. During 2009/10 First Milk invested £8.2m in a number of capital projects, compared to £4.4m in 2008/09. This money was spent on a range of site improvement and upgrade projects to advance efficiency.

“Overall, the business made progress during the year to 31 March 2010. Financially, we are in a stronger position, with improved profitability, a sound balance sheet and reduced net debt,” comments Bill Mustoe, chairman of First Milk. “We have entered 2010/11 with an increased momentum to deliver change. A range of efficiency savings and better market returns has delivered profits ahead of target for the first quarter. This has allowed us to fund a number of increases in members’ milk price.”