Group turnover for the business rose by 22% to £252.7m, from £206.5m for the previous full year. The business clocked up net profit of £3.2m, down from £6m in 2017.
A spokesman for First Milk told Food Manufacture: “In terms of profitability, our profit was in line with our budgets and expectations. Our strategic objective is to maximise the return of value to members, primarily through milk price, whilst retaining sufficient profits to meet our business obligations and commitments.
“Profit comparisons year-on-year therefore need to be considered in conjunction with relative improvements in milk price returned to members. The reduction in profit in 2018 is a direct consequence of improving our relative milk price.
“Our relative milk price index, which tracks our milk price against our competitors based on a 12 monthly basis, improved by more than 0.5 pence per litre between Mar 17 and Mar 18. This difference is after any market-related movements in price that have been paid, so demonstrates a real improvement versus the market.”
First Milk confirmed it had invested £3.2m across all its sites last year and had begun a £6.5m investment programme at its Haverfordwest Creamery in Pembrokeshire, Wales in March.
“The initial stage of this project, which has already started, will run until March next year and sees investment of around £4.5m in new silo capacity, buildings, pasteurisers and milk separators, as well as new heat recovery equipment,” according to the First Milk spokesman.
“This will build on the impressive capacity increases achieved in the last year to deliver further additional site capacity, as well as energy and cost savings and productivity improvements.”
Following this initial stage, investment would then be made in updates to the cheese-making equipment and whey handling facilities, which would deliver a further increase in capacity, he said.
“This exciting development will ensure that Haverfordwest continues to improve operating efficiency and can help us meet our growth objectives in the years ahead, as well as being able to balance our own milk pool.”
First Milk chief executive Shelagh Hancock said: “This second year of positive trading results demonstrates that First Milk is consistently delivering stable financial performance and making solid progress on strengthening and growing the business.
“Critically, we have done this whilst putting our farmer members back at the heart of the business and, most importantly, delivering improved returns to our members.
“As we look forward, our clear strategic focus is to drive profitable growth across our cheese and fresh milk businesses. We have embarked on significant capital investment at our sites to support the growing demand from our customers, enabling our members to increase milk production with confidence.”
First Milk has its headquarters in Glasgow and operates four creameries in Haverfordwest, Pembrokeshire; Wigton, Cumbria; Campbeltown, Argyll; and Kilmory, Isle of Arran.