Dairy co-op First Milk has emerged from its period of crisis and is now on a much more stable footing, CEO Mike Gallacher has said.
Speaking as the co-op announced a return to the black in its interims to 30 September, Gallacher said the “scale of our transformation has been delivered by focusing on the big things”. The turnaround plan, initiated when he joined First Milk in March 2015, was finally bearing fruit, with a “striking” improvement in its financial performance.
First Milk delivered pre-tax profits of £6.8m (compared with a loss of £2.4m last year), while operating profits grew from £1.2m to £9.2m and bank debt fell 43% to £26.1m.
“First Milk is now a simpler, more efficient business,” Gallacher said. “This is demonstrated through significantly improved financial results and most importantly through increasingly competitive milk prices to farmer members.”
A scathing internal review of the business last October (commissioned by Gallacher) found that First Milk had not put enough focus on its core business from 2012 to 2014. The business plunged into crisis during winter 2014 as mounting losses led to delays in paying its 900 farmer members.
After divesting loss-making parts of the business, the co-op was now in a much healthier state, Gallacher said. “We have focused on a solid core, based around British Cheddar, and in particular our long-term contract with Ornua, and very good liquid contracts with the likes of Nestlé.”
No comments yet