Operating profits were up to £9.2M from £1.2M in 2015, while profits before tax rose to £6.8M versus a loss of £2.4M last year. The company’s bank debt fell to £26.1M, compared with £46.1M last year.
The dairy co-operative said a programme of cost saving initiatives over the past 20 months had delivered a £33M improvement in profit for the business.
These included: exiting loss-making subsidiaries, improved operational performance, a new business strategy and a more effective co-op governance structure, said the company.
The company sold sports nutrition producer CNP Professional in October in an attempt to focus more closely on its core businesses of hard cheese and liquid brokering.
First Milk said it would pass on the turnaround in profits to its members through milk price increases. Prices increased by 8p per litre since July, with a 2p per litre increase forecast for January 2017.
Ceo Mike Gallacher said that when he took the leadership role in March 2015 there were challenges that required the company to make rapid and significant changes to the business.
“The combination of strategic, operational and governance issues have all needed to be addressed and the new leadership team have worked with focus and pace.
‘Simpler and more efficient’
“Twenty months on, First Milk is now a simpler and more efficient business. This is demonstrated through significantly improved financial results and, most importantly, through increasingly competitive milk prices to our farmer members.”
First Milk’s pre-tax losses in the year to March 2015 were caused by plummeting market values and were deemed unacceptable by former chairman Sir Jim Paice.
Chairman Clive Sharpe added: “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.
“The continued improvement in performance has given us the platform to increase our milk price faster than the market over the last six months and we are confident of further significant price increases for all our members over the coming months.”
First Milk interim results – at a glance
• Operating profits up to £9.2M from £1.2M in the prior year
• Profits before tax up to £6.8M versus a loss of £2.4M in the prior year
• Bank debt had fallen to £26.1M compared to £46.1M in the prior year