A trading update from First Milk, the Glasgow-based dairy co-operative, says the company is making progress in line with its 2015 business plan, despite the “hugely challenging” industry outlook.
The board says it now expects to deliver an operating profit before restructuring costs of £4 million in the year ended March 21st 2016, compared to the £20m loss recorded in the previous year. The business has also reduced its debt from £33m from the peak £84m in the2014/15 year.
Changes made in the last year under incoming chief executive Mike Gallacher include a focus on the core cheese and brokering business and bringing in a heavyweight commercial leadership team. “The business has moved fast to reshape to fit the new strategy, exiting loss making ventures and driving operational improvements” says Mr Gallacher. “Combined, this has delivered a return to operating profit at year end.
“We are on track and have made significant progress in reshaping the business and improving the operational performance, against a backdrop of a worsening dairy market. As we move into the second year of our turnaround, the focus will be on continuing to drive a wide range of operational improvements aimed at improving our efficiency and delivering a better service to our customers. Progress will allow us to start to improve our relative performance on milk prices as we implement a new operating system based on a stable P&L and transparent Milk Price Index. Our aim is to repay the loyalty of our members who have supported their business so strongly.”