First Milk’s performance improved markedly in the year to 31 March 2017, with a net profit of £6m compared with a loss of £5.1m in the previous year.
Over the past two years the co-op has put in place a new business strategy, sold loss-making subsidiaries and implemented a new governance structure.
Borrowing was also renegotiated, including a four-year deal with a new main lender, Wells Fargo, which should give flexibility and lower costs, said the co-op.
First Milk financial highlights
- Operating profit (before exceptional items) £11.7m (2016 – £6.0m)
- Net profit £6.0m (2016 – £5.1m loss)
- Group turnover £206.5m (2016 – £294.2m)
- Net bank borrowings £37.6m (2016 – £32.1m)
- Total group capital and reserves £22m (2016 – £17.4m)
- Average increase in member milk price 9p/litre (including payment of 2p/litre business performance supplement)
First Milk supplies dairy products and dairy ingredients to customers in both national and international markets, including block cheeses, raw milk, butter, skimmed milk powder and whey proteins. Its headquarters are in Glasgow, with four manufacturing sites across England, Scotland and Wales.
New chief executive Shelagh Hancock joined the co-op in April 2017 and First Milk secured a new long-term contract for fresh milk supply to Nestlé UK and Ireland. It also agreed a long-term cheese supply partnership with Tesco and Ornua Foods.
“The transformation of our business is complete,” said First Milk chairman Clive Sharpe.
“As a result, First Milk today is now a more focused and financially secure business. 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.”