Milk Link Progress Sees Profits Up 8%

By David Wilcock

Dairy co-operative Milk Link shrugged off the difficulties facing much of the food and drink sector to record an 8.2 per cent leap in profits last year. Profits before tax rose from pounds28.2 million in 2007 to pounds30.5 million, it announced yesterday. Turnover in the year to March 29 rose from pounds509 million to pounds523 million – an increase of 2.8 per cent.

Ronnie Bell, Milk Link chairman, said that he believed the firm was in a good position to overcome a difficult market.

"We ended the year financially and commercially stronger and most importantly we were able to translate this into increased returns for our farmer members," he said.

"Looking forward, although the wider dairy industry faces considerable challenges, I believe that Milk Link’s financial and commercial strength leaves us well positioned for the future. Above all, we remain totally committed to our strategy of vertical integration and, by adding value through processing, making more of our members’ milk."

The average price paid to members for their milk rose by 47 per cent from 8p to 25p per litre.

Neil Kennedy, chief executive, added: "I am pleased to be able to report that in the last financial year Milk Link made good progress towards our goal of becoming a leading producer of value- added dairy products. In doing so, we were able to reward our members’ loyalty, hard work and investment through substantially enhancing the returns paid to them as the business generated higher and better-quality revenues.

"The group’s financial performance was strong, reflecting substantially increased selling prices across all our retail products and dairy ingredients, our much- improved product and customer mix, the positive benefit of our 100 per cent acquisition of The Cheese Company, and our continued emphasis on driving out cost and leveraging greater efficiencies across the business. The latter being particularly important given the substantial increases in fuel and energy costs that impacted on our processing and distribution operations."

In May the company announced plans to shed up to 40 jobs in a efficiency drive. A quarter of the 160-strong workforce at a long- life milk processing plant in Crediton, Mid-Devon, face redundancy.

The company wants to install new hi-tech equipment to produce more milk for its retailers across the UK.

(c) 2008 Western Morning News, The Plymouth (UK). Provided by ProQuest Information and Learning. All rights Reserved.