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Milk Link reports year of ‘solid growth and development’
Milk Link has announced its results for the year ended 4 April 2009.
Key financial highlights include:
- Turnover increased from £523m in 2008 to £547m in 2009 (+4.6%), while turnover per litre increased from 37.7ppl in 2008 to 42.7ppl (+13.3%).
- Earnings before interest, tax, depreciation and amortisation (Ebitda), reduced from £30.5m in 2008 to £28.7m in 2009 (-5.9%). This 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.
- Profit before tax (excluding exceptionals) increased from £8.9m to £10.1m (+13.5%).
- Operating costs reduced to £81.7m from £83.6m (-2.3%), despite significant increases in input costs, particularly those relating to energy.
- Operating cash flow was £23.9m – up from £17.0m on previous year (+40.6%).
- Net bank debt fell by £8.5m to £76.1m – down from £84.6m at March 2008.
- Total member funds rose to £60.9m as at year end.
- Group gearing improved from 1.66 times to 1.25 times.
- Average member milk price paid out across the year increased by 4ppl to 25.6ppl.
- Processing interest payment relating to 2008/09 financial year increased to £4.1m, representing a 10.8% return on members’ qualifying loans.
“Despite a very challenging economic and trading environment, the year was one of solid growth and development for Milk Link,” said Ronnie Bell, Milk Link chairman. “We ended the year financially, structurally and commercially stronger and, most importantly, we were able to increase returns to our farmer members. Our average price paid to members increased by c.4 pence per litre year on year, and for the second year in succession the processing interest payment represented a return in excess of 10% on members’ qualifying loans. This means that cumulatively over the last three years, we’ve now paid in excess of £10m to members in relation to their investment in the business.
“Looking forward, 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. However, I believe that Milk Link’s established, vertically integrated business model and financial and commercial strength leaves us well placed to capitalise on opportunities that may arise, continue our growth and development, and ultimately come out of the downturn faster and steeper than many of our competitors. In doing so, we’ll provide our members with greater security, stability and sustainability.”
Source: Milk Link
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