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Cooperative dairy group First Milk reports turnaround in fortunes
THE cooperative dairy group First Milk has reported a turnaround in fortunes in the last six months after posting a pre-tax loss of £7.8m for the year ended March 31.
In the six months to September 30, this was turned into a pre-tax profit of £1.1m.
There were also stark contrasts in turnover in the two periods. For the last full year, First Milk ended with sales down £40m to £530m while the last six months alone saw a rise of £41m, bringing the half year turnover to £28m.
Chairman Bill Mustoe said: “We are well aware of the impact that 2012 has had on farm accounts over the last 18 months, and from analysing other dairy processor results over the last few weeks, it looks like last year was a challenging one for most in the dairy industry.
“However, our performance in the six months to September 30 demonstrates clear progress on our strategy, and makes us confident about our ability to increase returns to members in the remainder of the current financial year.
“In the year to March 31, we made a small pre-tax loss, before exceptional costs, of £0.8m during the year. This reflected the board’s decision to support members with a milk price which was not directly in line with the timing of market returns coming through in the second half of the year.”
However, Mr Mustoe said exceptional charges incurred during the year totalled £7m, leading to the total pre-tax loss of £7.8m.
“I appreciate that the impact of these various charges is disappointing for members, but it is important that we took the necessary steps to prepare the business for the future,” said Mr Mustoe.
He said First Milk, which has hundreds of Cumbrian farmer members, could deliver improved returns by operating across a range of sectors and markets, and a range of products, including developing Lake District Dairy company products.
“Five milk price increases in the last six months and a record-breaking return on capital, are a clear signal of the progress being made,” said Mr Mustoe. “We will look to further increase returns to members through the remainder of this financial year.”
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