Farmer owned co-op First Milk reported increased turnover and operating profit for the year ended 31 March 2019.
The dairy business, which includes 800 farmer members, witnessed a 7.8% increase in group turnover, from £252.7m in 2018 to £272.3m in 2019.
Operating profit was up from £6.6m to £7.2m but net profits were down from £3.2m in 2018 to £2.7m in 2019 with exceptional costs at £2.2m.
Net debt went down by £3.8m year on year while net assets increased by £4.4m. According to the co-op, this was achieved through a combination of a reduction in the pension deficit, investment in its processing ahead of depreciation, and the continued profitable and cash generative growth of the business.
During the year the co-op sought to increase cheese sales to UK suppliers as well as increase exports abroad. First Milk currently supplies 21 countries.
The co-op also became sole owner of the protein concentrate production facility at Lake District Creamery after buying Fonterra’s 51% share. And it has agreed a collaborative milk sourcing and supply chain management partnership with Yeo Valley, supplying conventional milk for their own-label manufacturing.
Chief executive Shelagh Hancock said: “Over the last 12 months we have been focused on further strengthening and developing the business, with stable financial performance, efficient manufacturing, strengthened commercial relationships and, crucially, improved returns to members.
“With a strong platform in place, we are committed to maximising the value that we return to our members. We remain clear that prosperity comes from building demand, growing capacity and securing supply – in that order. The dairy world is changing fast; economically, socially, technologically and politically.
“We will continue to be agile and adaptable, broadening our base and collaborating to deliver optimal supply chain solutions that deliver benefit for our members and our customers.”
The positive business performance allowed the co-op to further strengthen its relative milk price over the 12-month period.
Chair Chris Thomas said it was difficult to predict how the future may develop due to challenges related to commodity market price volatility, Brexit uncertainties and international trade disputes. But the co-op has built strong foundations, he added, and is well-equipped to deliver dairy prosperity.