First Milk has reported a full year loss

First Milk has reported a full year loss

UK dairy group First Milk has posted annual losses of over GBP5m (US$7.6m) despite higher sales thanks to the cost of closing a packing facility and to restructuring charges.

The company, which earlier this month faced questions over its future amid falling dairy commodity prices, today (28 January) filed accounts for the year to 31 March 2014.

It reported a net loss of GBP5.2m for the year to the end of March last year. The previous year, it reported a profit of GBP4.4m. The co-operative made a pre-tax loss of GBP4.3m.

First Milk pointed to one-off costs, including a charge of GBP7.5m from the closure of the Maelor packing facility, as well as restructuring charges.

Excluding these items, the company said pre-tax profits were higher at GBP3.5m, compared with GBP0.8m the year before.

Sales increased 15% to GBP610.5m thanks to improved returns for dairy products during the period.

"Whilst trading subsequent to the financial year end has been challenging ... the year to 31 March 2014 was a good one for First Milk. The group returned to profitability, benefited from increasing global demand for dairy products and the consequent uplift in revenue, and underwent significant strategic changes that will benefit First Milk over the long term," chairman Sir Jim Paice said.

A subsequent slump in dairy commodity prices has hit First Milk. Earlier this month, the company insisted its business is "very safe" after the decision to defer payments to its farmer members sparked speculation over the co-operative's financial security.