First Milk reports significant progress



First Milk, the UK's largest dairy farmer co-operative, today announced its results for the full year ended 31 March 2007.

Key highlights include:

  • Turnover of £484m [compared to £476m in 2005/6]
  • Profit on ordinary activities before tax¹ (excluding exceptional charges) of £1.5m [compared to £3.5m in 2005/6]

Peter Humphreys, chief executive of First Milk commented:

"In year to 31 March 2007 we made significant progress on our strategy to develop First Milk.

"The acquisition of the cheese and dairy ingredients businesses from Dairy Crest in October 2006 means that we now own the UK's biggest cheese supply business, and have an ingredients business with huge potential.

"First Milk is now the only cheese business that can supply Scottish cheese from Scottish milk, English cheese from English milk, and Welsh cheese from Welsh milk. This gives us a unique advantage in our conversations with retailers.

"We believe that there is a huge untapped opportunity for us to develop and grow the retailer brand cheese category. However, alongside this work, we will develop new First Milk brands to complement our existing Highlands and Islands range, such as the Lake District Cheese Company brand, which we launched in Cumbria last week.

"While we did not take over full operational control of the Ingredients business from Dairy Crest until 1 April 2007, in our new financial year we have already reshaped that business and began forging relationships with international partners.

"While the start-up costs for the new businesses impacted on our numbers in the year to 31 March 2007, the purchase of the cheese and ingredients businesses have built on our strong foundation.

"However, I believe that further strategic moves are essential to build on this base and allow us to deliver what is needed for our farmer members – a long-term sustainable price that permits producers to invest and expand. The fact that we have announced price increases totaling over eight pence per litre in the period from April 2007 shows that we are on the right track"

Merger update

Humphreys continued:

"Our Executive team and advisers and our counterparts at Milk Link are making good progress on the due diligence activity and the development of a joint business plan.

"Prior to making a decision on whether to recommend a merger to members, the Boards of both companies will review all the relevant information.

"We expect to be able to provide a further update in mid December."

ENDS

¹ First Milk, as a co-operative, is driven by what it can pay to its' members and not retained profits. Its' retained profit is the minimum necessary to satisfy the capital needs of the business. The profit number is calculated after all payments to members in the year.



Notes to editors

First Milk is the largest dairy farmer co-operative in the UK. Our members' farms stretch from Central Scotland to the South of England, and from West Wales to East Anglia.

Our milk division handles 1.8 billion litres of milk per annum and our cheese business is the largest UK-based cheese supplier. First Milk also supplies a range of customers with innovative products through its' ingredients business.



For further information, please contact:

Paul Flanagan (Group Communication Director) on 07767 241452



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