Milk Link saw pre-tax profits grow nearly 14% in the year ending 4 April 2009, according to its latest results released this week.
Turnover was up slightly at £547m with turnover per litre up to £42.7p. Earnings before interest, tax, depreciation and amortisation reduced 6% to £28.7m reflectng a higher member milk price and less cash to be retained to meet bank covenants.
Costs shrank slightly to £81.7m, despite increases in inputs costs, particularly energy, with further savings expected from the exit of dairies at Staplemead and Kirkcudbright.
Chief executive Neil Kennedy said he was delighted the co-op had increased its average member milk price by 4p/litre during the last year and paid a processing interest payment on members’ loans worth £4.1m, a 10% return on members’ loans. “This means that in the past three years we have paid over £10m to members in relation to their investment in the business.”
Mr Kennedy said Milk Link had paid down its bank debt by £8.5m to £76.1m.
“Overall, we’ve made solid progress. We’re doing the things we said we were going to do. Our farmgate milk price is up by 4p/litre, but, more importantly, it is higher than the DEFRA average farmgate price by 1p/litre, Mr Kennedy said.
Key changes made this year included Milk Link’s exit from its Staplemead Creamery at Frome, which it sold to French food business Andros. “This was an important milestone and we avoided the costs that closing the plant would have meant.” Milk Link is to close its small factory at Kirkcudbright, but Mr Kennedy stressed the co-op remained fully committed to Scotland. “Our creamery at Lockerbie is very important for us and I can see that expanding in the future.”
Since taking over as chief executive in April 2008, Mr Kennedy said he had significantly improved the co-op’s structure, saving a further £1m in costs.
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