First Milk has reported an improvement in profits to £1.1m in the six months to 30 September, turning around a loss of £7.8m in the previous full financial year.
Announcing both its full-year results for the year to 31 March, and its subsequent half-year results, the dairy co-operative today painted brighter picture of its progress in 2013.
For the half-year to the end of September, turnover rose 17.3% (£41.3m) to £279.8m. First Milk said its more recent performance demonstrated clear progress on its added-value strategy, and it was confident in its ability to increase returns to members in the remainder of the current financial year.
“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 chairman Bill Mustoe.
During the year to 31 March 2013, however, First Milk’s turnover declined by £40m to £529.8m. The £7.8m pre-tax loss it sustained during the year amounted to only £0.8m before exceptional costs, and reflected First Milk’s decision to support members with a milk price which was not “directly in line with the timing of the market returns coming through in the second half of the year”, added Mustoe.
Exceptional charges comprised £4.5m relating to the reduction in value of goodwill and depreciation of assets at its Glenfield site; £1.1m in charges relating to First Milk’s December 2012 cheese recall; £900,000 associated with restructuring and redundancies; and £500,000 in professional fees.
Mustoe added First Milk was now concentrating spend on fast-growing markets such as exports, foodservice and lifestyle nutrition by developing new products such as its Lake District Dairy Company Quark and Frumoo which “move us up the margin ladder”.
First Milk is seeking to turn Lake District into a £100m brand by 2015.