First Milk has confirmed that its turnaround plan is delivering tangible results, with its financial performance in the six months ended 30 September 2015 showing significant improvement over the previous year.
Operating profit for the first six months of the year was £1.1m compared to a loss of (£7.6)m for the same period last year – an improvement of £8.7m. It is anticipated that the results for the second six months to March 2016 will also show a positive operating profit – compared to an operating loss of £(12.3)m in second half last year. As a result for the current financial year as a whole, the business will also make an operating profit.
Debt has continued to reduce, and at the end of September 2015 was £46.1m, compared to £60.7m as at March 2015.
First Milk CEO Mike Gallacher commented, “The actions taken to reduce costs, improve quality, and drive operational performance are delivering results, with further progress planned over the next year. We are confident that this will deliver improved milk prices and a more sustainable business model for our farmer shareholders. My team and I are very aware of how tough it is at present on farm and the need to sustain this improvement trajectory to deliver benefits to our members.”
NFU Scotland Chief Executive, Scott Walker said, “A successful First Milk is hugely important to the Scottish dairy industry as many Scottish milk producers are wholly dependent on First Milk as their milk purchaser. The turnaround plan has returned First Milk to profit and delivered a sustainable platform for the company but it is clear that, in doing so, much of the risk has now been passed back to members through an unsustainable price for their milk. In his comments, it is clear that Mr Gallagher recognises the severe financial position of his members and the need to deliver a much improved milk price that allows both First Milk’s producers as well as the company to be sustainable. That can’t come quick enough for many grass roots farmers.”
“NFUS will continue to work with everyone who produces, sells and consumes milk to move towards a supply chain that delivers a fair reward for the risk taken by dairy farmers. And we will continue to work with First Milk on delivering the action needed to ensure that farmers in their Scottish milk field receive a price that allows them to see a future in milking cows.”