30th January 2015
122 member farms were represented at First Milk's AGM in Haydock this morning, either in person or through proxy votes sent in advance.
The Board was questioned by members in detail on performance during the previous and current financial years, and around the moves made to strengthen the financials of the business earlier this month.
The meeting concluded with a number of members reiterating the importance of the Board focusing on routes to develop a stronger First Milk to work alongside their own farm businesses.
Members passed all the resolutions put forward by the Board. As part of this, members re-elected vice-chairman Nigel Evans - who farms in Pembrokeshire - as well as finance director Gerry Sweeney.
Following formal AGM business, there was a presentation by Gerry Sweeney to members on trading in the current year, which clearly demonstrated how challenging the market conditions have been. The text below covers the main points of the presentation.
The volumes which First Milk handles has increased beyond its expectations by 100 million litres over the last 12 months. Much of this additional volume has been processed into skimmed milk powder at our joint venture facility at Westbury.
The proportion of milk that it has processed through Westbury has gone up from 4% two years ago, to 19% in the current financial year. The remainder of members' milk is processed into cheese (46%) and sold to 3rd parties (35%).
Market returns from butter/powder have dropped 21ppl over the last 12 months. Coupled with other factors including a 30 - 40% drop in mild cheddar and curd values, this contributed to a trading loss for the six months to 30 September 2014 of £12.1m.
Mr Sweeney emphasised the stronger position that the co-operative will be in by the end of this financial year, as a result of the measures which were announced on 8th January. He also said that the company was now making profits month-on-month.
He recognised that First Milk's banks continue to be fully supportive which is reflected in the recent extension of banking facilities through to January 2016. The company will be renewing its banking facilities during 2015.
Finally, he forecast that money owed to lenders would be around £65m by the end of this financial year, with this figure reducing further by Sept 2015.
About First Milk
First Milk is the UK's only major dairy company, 100% owned by British farmers. It supplies a wide range of dairy products and dairy ingredients to customers in both national and international markets including block cheeses, soft cheeses, raw milk, butter, skimmed milk powder, whey proteins and sports nutrition brands.
It generates annual revenues of £610 million (2013/14 figures) and is headquartered in Glasgow with seven manufacturing sites across England, Scotland and Wales.
First Milk's aspiration is to provide consumers with great-tasting nutritious food, while delivering value for every part of its farmers' milk. As a business with a passion for innovation and sustainability, it is constantly seeking fresh ways of working with partners across the supply chain to drive pioneering solutions to industry challenges.
For further information on First Milk, please visit www.firstmilk.co.uk or follow the company on Twitter @first_milk and YouTube www.youtube.co.uk/firstmilk1.
For media enquiries, please contact:
head of communications
M: 07767 241507
M: 07984 349936