First Milk has the white stuff with £6m profit

DAIRY: Farmers hailed for hard work and sacrifices which have transformed co-op

Less than three years ago farmers’ cooperative First Milk was on its knees and producer members had to pay the price with plummeting incomes and postponed milk cheques.

Yesterday a transformed business posted financial results which showed an £11 million turnaround in fortunes over the last 12 months.

From a £5.1m net loss in 2016, the latest accounts show a net profit of £6m for the year ending March 31.

However, NFU Scotland (NFUS) was not slow to point out that dairy farmers had made “huge sacrifices” in order for the company to achieve that transformation.

In the last financial year First Milk group turnover was £206.5m (2016: £294.2m), net bank borrowings increased to £37.6m (2016: £32.1m) and total group capital and reserves increased to £22.m (2016: £17.4m).

There was capital investment of £3.8m across all sites compared to £4.8m in 2016.

The milk price paid to producer members rose by an average 9p per litre and included a business performance payment of 2ppl.

NFUS milk policy manager George Jamieson described the solid trading results as “very encouraging” and indicative of the hard work and sacrifice following the drastic steps which were taken.

First Milk chairman Clive Sharpe said the business had been transformed over two years, with debt refinancing, a new long-term contract for fresh milk to Nestle UK and Ireland, a long-term cheeses supply partnership with Tesco and Ornua Foods and the sale of the lossmaking CNP sports nutrition business.

“The transformation of our business is complete and, as a result, First Milk today is now a more focused and financially secure business,” he said.

“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.”

The co-op’s new chief executive, Sheila Hancock, said the team would continue to have a “relentless focus” on efficiency and quality.

However, Mr Jamieson made it clear that more could be done to build trust.

He said: “We believe there is a need, and a great deal of sense in increasing members’ understanding of governance and members responsibilities, measured not just by attendance and engagement with meetings and the AGM, but also building a culture of cooperation.”

First Milk’s transformation has seen the cooperative produce an £11m turnaround over the last year.