FDBusiness.com

UK dairy co-operative First Milk has delivered a robust performance and solid financial results for the year to 31 March 2012. Pre-tax profits increased from £7.2 million in 2011 to £13.3 million but £9.6 million of this figure relates to the profit made on the sale of First Milk’s shareholding in Robert Wiseman Dairies, which has been acquired by Mullar Dairy (UK).

Group turnover increased by 1% £579 million. During the year First Milk increased the milk prices paid to its farmers – farmers in the liquid pool saw their price increased by 2.9ppl, whilst those in the cheese and balancing pools saw their prices increase by 2.98ppl.

First Milk is committed to rewarding its members for the money that they have invested in the business. In the last 12 months the dairy co-operative has made two payments, in July 2011 and January 2012, which together represent a return of 6% on members’ capital for the year.

Net debt rose during the year by £3 million to £47 million, mainly as a result of increased stocks required to facilitate the growth in the sales in the company’s Lake District Cheese brand, investments at manufacturing sites and the acquisition of Kingdom Cheese and Kingdom Dairies, but reduced in February 2012 following the sale of the Wiseman stake.

£6.3 million was invested in capital projects during 2011/12 and First Milk is continuing to invest at all its sites to drive efficiencies. During the financial year First Milk was also able to recruit 195 million litres of new milk.

“We have set out a clear path to develop First Milk into an added value food business and 2011/12 was notable for the opportunities we realised, as well as the delivery of a robust financial performance in tough market conditions,” comments Bill Mustoe, chairman of First Milk. “Over the last 12 months we have bought two businesses – a soft and grated cheese operation in Fife and a sports nutrition business in Manchester. These purchases have not only enabled us to diversify our product and customer base, but most importantly they provide a broader platform to drive cash for our farmer shareholders.