National Milk Records has seen a sharp jump in its share value, but is struggling to gain the liquidity it needs because so many shares remain dormant or forgotten.
NMR, which owns three businesses involved in livestockrecording and milk analysis, turned a £14,000 loss in 2008 into a £500,000 profit in its accounts for the year ending 31 March 2009.
Its share price, listed on the PLUS market, which specialises in small and medium-sized enterprises, has jumped 50% to more than 31p/share.
It has outperformed the PLUS market itself, which has increased by 20%.
NMR managing director Andy Warne said NMR’s presence on the PLUS exchange was important for shareholders.
“It gives shareholders an opportunity to trade shares in NMR. We’ve had a great year, and there’s a lot more interest in our shares, but we need to get more liquidity into our shares,” he said.
The company was formed 15 years ago after de-regulation in the milk industry saw the Milk Marketing Board dismantled.
Some 28,000 dairy farmers found themselves with shares in the new company.
But as dairy farmer numbers have declined, many of the share certificates – some with very low values – have slipped into obscurity.
“There are now around 13,000 dairy farmers in England and Wales, which means there is a great wedge of shares out there which people may not even be aware they have.”
While NMR’s share price had benefitted from investors looking to get out of equities in other sectors like property, this was not the only driver, as it had outperformed the market average by 30%, Mr Warne said.
“Our strong performance has been driven by efficiency gains, not by increasing turnover. Investors have seen us as a significantly under-valued business.”