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First Milk Record Losses But Protect Members

25 September 2009

UK - Despite a decline in turnover and significant losses, First Milk are positive about the future.

First Milk increased the returns paid to its members in the year 31 March 2009 by an average of 3.76 ppl. However, group turnover declined by 3 per cent to £582 million, mainly due to a decrease in powder, cheese and whey returns in the second half of the year.

With a loss after tax of £7.1 million during 2008/09, Peter Humphreys, Chief Executive said, "As we have seen from the results of others who operate in the UK dairy sector, 2008/09 was a year of challenges and volatility. Recognising that rising on-farm costs were putting serious financial pressure on our producers, as a Board we took the decision in late 2008 to utilise the reserves we had built up in order to shelter members as much as possible from the market downturn."

Despite this, First Milk still have a strong balance sheet and have secured a £130 million deal over three years with Lloyds Banking Group. "The deal provides us with a more flexible approach to our lending and ensures that as the volumes and the value of the milk that we produce grow, the banking facility grows too," said Mr Humphreys.

NFU dairy board chairman Gwyn Jones said: “Strong strategic and financial leadership is needed in order to maintain confidence in the business, improve the position and implement a positive growth strategy. We can’t ignore these results but I think they have to be taken in a global context which has seen the world facing a very tough economic climate. The dairy sector itself has experienced incredible market volatility which is here to stay and which dairy farmers and milk buyers must start to manage."

“However," he said, "I believe First Milk has a solid foundation for success. As a member-owned co-operative it needs to focus on ensuring its members are getting the best returns possible. Communication and clarity from the top are key to making this happen; included within that are those ex-Dairy Farmers of Britain members supplying First Milk.”

TheCattleSite News Desk


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