First Milk has pledged further milk price progress following the publication of its mid-year financial results.
Accounts for the Glasgow-headquartered farmers’ co-operative, which cover the six months to September 30, reveal pre-tax profits of £6.8million. This compares with a pre-tax loss of £2.4million for the same period last year.
Operating profits at the co-op, which has four manufacturing sites across Scotland, England and Wales, were £9.2million, compared with £1.2million previously.
Bank debt in the six-month period was £26.1million, compared with £46.1million in the year before.
First Milk said the “strong results” were a result of a radical transformation of the co-op in the past 20 months.
It said the turnaround plan, which has included the development of a new business strategy and divestment of loss-making subsidiaries, had delivered a £33million improvement in business performance.
Chief executive, Mike Gallacher, said: “The huge challenges at First Milk were very evident in early 2015 and required us to make rapid and significant changes to the business.”
At the beginning of 2015 the co-op was forced to delay payments to farmers due to cash-flow problems.
Mr Gallacher said First Milk was now a simpler and more efficient business following a “simple business model that will provide strong and stable returns for our farmers members”.
He added: “The largest challenge for all UK dairy farmers over the last two years has been the wider market performance and it is encouraging now to see both First Milk and the market recovery well underway.”
Fist Milk chairman, Clive Sharpe, said: “Rapid surgery was required from the new management team over the last 20 months and it is a testament to our farmer members that they recognised and supported this through the most difficult market conditions.
“Along with member support, we now have had a highly experienced executive team working closely with a smaller, more commercial board and strong farmer council to make improvements in every corner of the business.”
He said the continued improvement in business performance in recent months had allowed the co-op to increase its milk price faster than the market.
“We are confident of further significant price increases for all our members over the coming months,” added Mr Sharpe.
