First Milk grows profits in first half

Improved dairy commodity prices helped First Milk increase pre-tax profits by over £12m in the first half of this year, according to results announced today (3 November).

Profit before tax was £3.2m in the six months to 30 September, up from a £9m loss in the same period last year, on turnover up £24m to £280m.

The co-op said better returns from cheese and milk powder markets were a key reason for the improved performance, alongside reduced costs and brand growth.

“Benchmarking these half-year numbers against the prior year shows a greatly improved performance,” First Milk chairman Bill Mustoe said. “The results in the first six months of last year were poor, mainly as a result of paying out a milk price that was ahead of market returns, a tactic we no longer pursue.”

The co-op’s net debt was £32m down on H1 2009 at £63m, partly due to the sale of one-third of its Wiseman Dairies shareholding for £18.5m last November.

“Looking ahead to the next six months, we are convinced that our strategy continues to be appropriate for the tough market conditions and expect this solid turnaround to be maintained.”

However, despite the improved results, the co-op did not give any indication of whether its milk price for farmers would be increased. “Whenever we get money in, we will pay it out to members,” a spokesman said.