Profits up at Milk Link
MILK Link has reported increases in turnover, earnings and profit for the year to April 2, 2011.
Chairman Ronnie Bell said: “Overall, we have reinforced our position as a national business with a strengthening market presence.
“We have well invested processing facilities located nationwide, a growing and complementary national milk supply, deepening relationships with an expanding list of strategic customers and, most importantly, an increasingly supportive farmer membership.”
- Turnover £36 million to £586m
- Earnings before interest, tax, depreciation and amortisation (EBITDA), up from £29.2m to £34.4m
- Profit before tax increased to £15.1m ( £10.6m in 2010)
- Net bank debt down £1m tp £79.9 million (despite acquisition of Cornish Country Larder for £7.1m)
Milk Link had its lowest number of producer resignations in its history - 14. This represented 12m litres of milk but more than 300 new members were recruited, 225 of who were directs attaining full member status.
The net increase in milk handled was 75m litres (total more than 1.5bn litres) and the increase in volume from full members was 200m litres.
Chief executive Neil Kennedy said membership was likely to be around 1,600 by the end of the current year and a recent member satisfaction survey had returned an 85 per cent ‘satisfied’ rating.
Like other businesses oil related costs were an issue but business efficiencies had contained the total increase in costs to one per cent – despite a 13 per cent increase in the volume of milk handled.
In the year member milk price increased by an average 2.75ppl (manufacturing) and 2.53ppl (liquid). In the first part of the current year, Mr Kennedy pointed out, there had been a further 1ppl increase, a processing payment worth the equivalent of 0.4ppl and the end of the levy for ‘paid-up’ members. The standard litre price now was 27ppl.
Basic fundamentals pointed to reasonable prospects for further increases – firm commodities markets and potential tighter supply. But balanced against this was a flat economy and consumer resistance to retail price increases.
Milk Link’s own brands contributed some 10 per cent to total performance with much of the balance being the supply of customers’ brands.
Mr Kennedy said it was not policy to disclose the actual contribution of different sectors of the business but all were profitable to differing degrees. Milk Link’s costs associated with Westbury had been significantly reduced when Arla became a shareholder.
Other key figures
- Members’ funds increased by £8.5m to £67.9m
- Capital and reserves increased by £7.6m to £10m
- Gearing reduced
- 2010/11 processing interest equating to a 9.25 per cent return on member qualifying loans
- Remuneration to exec. directors £1.04m (chief executive £564,000 - down £4,000)
- Remuneration to non-exec. directors and farmer-elected directors £463,000