First Milk has confirmed that its turnaround plan is delivering tangible results, with its financial performance in the six months ended 30 September 2015 showing significant improvement over the previous year.
Operating profit for the first six months of the year was £1.1m compared to a loss of (£7.6)m for the same period last year – an improvement of £8.7m. It is anticipated that the results for the second six months to March 2016 will also show a positive operating profit - compared to an operating loss of £(12.3)m in second half last year. As a result for the current financial year as a whole, the business will also make an operating profit.
Debt has continued to reduce, and at the end of September 2015 was £46.1m, compared to £60.7m as at March 2015.
First Milk CEO Mike Gallacher commented: "The actions taken to reduce costs, improve quality, and drive operational performance are delivering results, with further progress planned over the next year. We are confident that this will deliver improved milk prices and a more sustainable business model for our farmer shareholders.
"My team and I are very aware of how tough it is at present on farm and the need to sustain this improvement trajectory to deliver benefits to our members."
As part of the turnaround plan announced in May, new chief executive Mike Gallacher announced the establishment of business units, significant restructuring, the appointment of a new experienced executive team and new commercially based pricing scheme.
The company has also made a number of heavyweight appointments, including Kenny Bain (group operations director, ex Unilever, ABF, Mars), Brian Mackie (chief operating officer, ex Starbev/Molson Coors Europe, Maxxium Worldwide, Cott Corporation) and most recently Carl Ravenhall (non-executive director, ex Müller, Milk Link, Adams Foods).
An independent review of First Milk’s governance was completed over the summer, with its recommendation are now being implemented. It is expected that a new smaller commercial Board structure will be approved by members before year end. This will be followed by the appointment of a new commercially experienced chair following the conclusion of a search conducted by leading headhunters Odgers Berndtson.
