New Capital Structure Proposals for First Milk

First Milk is looking to introduce a new capital structure to reward its members' investment.

The proposal, which will be voted on by First Milk members at their AGM in November, will reward members' contributions through a combination of interest and dividend payments plus a new share scheme, where members can 'trade' their shares.
In addition to continuing the existing commitment to pay interest on a member's capital account, the structure introduces new preference shares, on which members will be entitled to a dividend based on the performance of the business.

First Milk Chairman, Richard Greenhalgh, commented:

"As First Milk has grown over the last few years, members' capital invested in the business has also grown considerably.

"We have carried out extensive research into potential capital structures, looking at farmer co-operatives in Britain, Europe and further afield, in order to create a model that is fair and transparent.

"The new structure aims to reward members' loyalty and their milk volumes. We believe that it will also enable members to have greater clarity around how the business is performing."

First Milk members will vote on whether to approve a new set of Rules implementing the new capital structure at First Milk's AGM on 4 November.

If approved, the new capital structure would 'go live' on 1 April 2009.

Notes to editors
First Milk is the largest dairy farmer co-operative in the UK. Its members' farms stretch from Central Scotland to the South of England, and from West Wales to East Anglia.
The business has three divisions: Milk Operations; Cheese; and Ingredients.
Milk Operations handles approximately 1.8 billion litres of milk per annum from around 2600 producers. This milk is supplied to First Milk's cheese business and to many of the leading names in the industry.
The First Milk Cheese Company is the largest UK-based cheese supplier.
First Milk's Ingredients business supplies a range of customers with milk powder and whey products for functional foods, protein drinks, pro-biotics, pre-biotics, pharmaceutical, bakery and confectionery products.

For further information, please contact:

Jill Coyle on 07825 625205 or Paul Flanagan on 07767 241452