11 April 1997

30,000 producers gain from NMR share issue

By Philip Clarke

SHARES in National Milk Records have been sent to almost 30,000 eligible producers, establishing the former Milk Marketing Board div-ision as an unlisted public company.

Some 7.2m shares have been allocated, based on the value of milk sales to the old MMB in 1992/93. While they carry a nominal value of 10p each, their true worth will not be known until the summer, after an independent valuation of the company.

Farmers will then be notified of the rate and will have a 30-day trading period (starting in August) in which to buy or sell shares at the stated price.

NMR has assets of about £5m (after writing off £2.2m of goodwill), giving shares a net asset value of 69p. But senior managers would not be drawn on how close this might be to the official transfer price. In addition to the formal trading period, farmers may also exchange shares on a private treaty basis at any time and at any price. They may also sell them to any other third party.

But the expectation is that the company will remain firmly in farmers hands. "That has certainly been the case with the other ex-MMB companies (Genus and Dairy Crest)," said NMR chief executive, Robin Turner.

NMR was set up in 1943 within the MMB and is now Europes largest milk recording and information processing organisation. It currently has 13,000 customers covering 52% of dairy herds in England, Wales and Scotland.

"Despite the obvious difficulties facing the UK cattle industry (BSE and falling milk prices) our prospects are encouraging," Mr Turner claimed.

Unaudited trading accounts for the 10 months to Jan 31, 1997 show the firm achieving a profit of £125,000 on sales of £13.4m. This compared to a loss of £316,000 in the previous full year, though this was primarily due to £1.38m spent on a new computer system.

Mr Turner said he was not unduly concerned about the likely drop in producer numbers as milk prices fall. Those that remained would need a good understanding of their businesses to stay in profit – information NMR would provide.

And the company was also developing income streams from other sources. "We are looking for an active involvement in the governments proposed British Cattle Movement Service," said Mr Turner.

Overseas expansion also features highly in the companys plans. "We are looking at countries with expanding dairy industries, backed by government support, in which to sell our services," he said. South America and the Pacific Rim fit this description. &#42