Higher branded sales have helped drive a jump in annual profits at UK dairy co-operative First Milk.
The company yesterday (18 July) reported net profit of GBP6.8m (US$10.9m) for the year to 31 March, up from GBP327,000 a year earlier. First Milk’s pre-tax profits reached GBP7.2m, compared to GBP360,000 a year before.
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The co-op’s turnover was up 7% at GBP573.2m and a spokesman said “growth” in the company’s brands – and the associated benefit to margins – was a “main factor” in the rise in profits.
“The Lake District Creamery brand alone now has over GBP50m per annum in retail sales,” he told just-food.
First Milk succeeded in increasing profits at the same time as upping the price it pays its farmer-members for milk and the spokesman said the co-op’s bottom line was also helped by moves to lower its costs.
During the year, First Milk and rival co-op Milk Link agreed to sell a minority stake in their skimmed milk powder and bulk butter venture Westbury Dairies to Arla Foods.
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By GlobalData“Bringing Arla into the Westbury powder and butter site was probably the largest single saving for us,” the spokesman said.
He added that First Milk’s profits benefited from “partnerships we are developing along the supply chain” and pointed to its deal with dairy ingredients Volac International.
First Milk had previously processed the whey at one of its own sites in north Wales but it now sells the raw material to Volac. The ingredients firm processes the whey at its site 60km away from the First Milk creamery at its site in Felinfach and then uses it to make dairy ingredients for customers across Europe.
