Satisfactory Interim Performance by Milk Link
Milk Link, the UK dairy co-operative, has more than trebled profit before tax to £12.2m in the first half of 2010, compared to the corresponding period in the previous year, and increased EBITDA from £12.5m to £21.3m. Group turnover was £283m, up from £259m in the first half of 2009.
The 2010 first half financial performance reflected the benefit from a full six months of contribution from Llandyrnog Creamery acquired in June 2009 and at the same time not having to manage the impact of a reverse in stock profits as was the case in the first half of 2009.
“The business performance was achieved against the backdrop of a highly challenging trading environment, as the weakness of the economy and fragility in consumer confidence had an inevitable impact on our core retail and food service markets. In particular, we continued to witness intense competition for market share and unprecedented levels of deep cut promotional activity, particularly on branded Cheddar, which resulted in an erosion of overall returns from the market,” explains Neil Kennedy, chief executive of Milk Link. “From a Milk Link perspective this was partially offset by our being able to take advantage of unseasonably strong dairy commodity prices, increased levels of milk production from our members and ‘direct’ suppliers and the leveraging of a series of cost saving and efficiency initiatives.”
Neil Kennedy, chief executive of Milk Link.
Milk Link has completed its refinancing and the new competitive, longer term and more flexible facility provides the group with the necessary funding for its ongoing business operations, capital investment programmes and growth strategy.
“Looking forward to the second half of the year the overall economic and trading conditions are likely to remain challenging. Consumer confidence and disposable incomes will come under greater pressure from increased VAT rates and public spending cuts which will continue the drive to offer price led promotional deals in the retail and foodservice markets,” he says. However, Milk Link expects full year profits for 2010/11 to be in line with its budget and ahead of last year.
