Milk Link has defied the cost pressure in the dairy industry to post a strong set of full year financial results.
The farmer-owned processor this week reported a 2.8% increase in turnover to £523m for the year to 29 March, with EBITDA rising 8.2% to £30.5m. The milk price paid to members increased from 17ppl a year ago to 25ppl.
The company reduced its operating costs by £1.1m to £83.6m despite rising core input costs, and improved its general reserves from being £3.9m in deficit at the end of 2007 to £0.2m in surplus now.
The results were boosted by a strong performance from a number of Milk Link's major brands, with Tickler extra mature cheddar, Lockerbie cheeses, and Moo and Organic Moo long life milks increasing sales.
Despite the strong figures, dairy industry cost pressure was likely to continue, said group finance director Nairn Glen, and the company would have to continue to streamline production costs and increase efficiency. "We can't expect that we can pass on [to retailers] every cost increase coming our way," he added.
Improved efficiency would come through the Project Vision investment programme, which had already resulted in a major upgrade of the company's Oswestry cheese packing plant. Further efficiency programmes had also been carried out at Staplemead, Taw Valley and Lockerbie creameries, and Westbury Dairies.
"Financial performance reflected substantially increased selling prices across all our retail products and dairy ingredients, our improved product and customer mix, our acquisition of The Cheese Company, and our continued emphasis on driving out cost", said chief executive of Milk Link, Neil Kennedy.
Milk Link also outlined plans to increase its R&D activities over the coming year with the opening of an Innovation Centre, and identified flavoured milk and organic cheese as significant growth markets.