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The reforms follow an improvement in the supplier’s financial standing over the past two years

Dairy co-op First Milk has seen its finances recover to such an extent that it will introduce a ‘member premium’ in the form of a 13th payment to its farmer suppliers from next year.

The move, part of a series of reforms to First Milk’s capital structure announced this week, will see members receive an extra 0.25p per litre payment annually. It follows an improvement in revenues during the past two years, which led to an increase in operating profit before exceptional items from £6m in 2015/16 to £11.7m during the 2016/17 financial year. 

First Milk is also fixing its capital contribution targets in a bid to enable members to “grow and expand their milk production without a requirement to contribute additional capital”, it said. 

The business, which now primarily focuses on supplying bulk cheese to third party partners such as Ornua, has also launched a share trading platform to make it easier for members to trade shares in their dairy farming businesses.

First Milk now had financial security, said CEO Shelagh Hancock, with the changes to its capital structure recognising “the loyalty of our long-standing members, removing some existing barriers to expansion on farm, and providing a simple and transparent way for members and retired members to trade shares”, she added.

“As we look to the future, these changes will help us deliver our growth strategy, which sees us investing significant capital into our sites to ensure we can meet the growing demand from our customers for our high-quality milk and cheese. By working together to deliver our growth plans I am confident that we will deliver prosperity for our members.”

First Milk ‘completes turnaround’ as operating profit doubles