UK dairy co-operative Milk Link today (10 June) booked mixed annual results with the higher prices paid to its members weighing on earnings.
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The company said underlying pre-tax profits rose by 13.5% to GBP10.1m (US$16.6m) but said EBITDA fell by 5.9% to GBP28.7m.
Milk Link said the fall in earnings at the EBITDA level “reflected the higher milk price paid to members, the need for less profit to be retained in the business to meet bank covenants and the absence of cheese stock profits enjoyed in the previous year”.
Revenue rose 4.6% to GBP523m thanks to a “strengthened customer and product mix”, the company said.
Earlier this week, Milk Link agreed to buy a creamery from failed UK dairy co-operative Dairy Farmers of Britain.
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By GlobalDataMilk Link then told just-food that it was “committed” to growing through acquisitions and chairman Ronnie Bell said today that the corporate shake-up in the UK dairy sector would likely continue.
“Trading conditions will continue to be extremely difficult throughout the next financial year. This will result in both challenges and opportunities as increased market pressures impact on returns and accelerate the need for market rationalisation and consolidation,” Bell said.
