Our Financial Performance
Milk Link Annual Report 2010 [download here]
As our most recent Annual Report and Accounts demonstrate, Milk Link enjoyed a solid performance during the last full financial year. Key financial highlights included:
- Turnover increased from £547 million in 2009 to £550 million in 2010 (+0.5%)
- Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), increased from £28.7 million in 2009 to £29.2 million in 2010 (+1.7%).
- Profit before Tax increased to £10.6 million from £0.5 million in 2009 (in part reflecting the strategic reviews which took place in the prior year which led to exceptional charges of £9.6 million).
- Operating cash flow was £39.7 million - up from £23.9 million on previous year (+66%).
- Net bank debt was only £4.8 million higher than the prior year of £76.1 million at £80.9 million, despite the acquisition of the Llandyrnog Creamery for £25.6 million during the year.
- Profit attributable to Members was £10.1 million.
- Processing Interest Payment relating to 2009/10 financial year increased was £3.3 million representing an 8.1% return on Members’ Qualifying Loans.
Commenting on Milk Link’s performance Ronnie Bell, Milk Link Chairman said:
“Milk Link continued to make good progress over the year as we strengthened financially, structurally and commercially and made strong progress towards our objective of becoming the UK’s leading added-value dairy processing business. We are now a national business with a growing market presence and reputation for producing high quality innovative products and delivering excellent service levels. We have an increasingly supportive membership, growing national milk pool and deepening relationships with an impressive list of strategic customers.
“We are focused on continuing to develop the business and returning the benefits to our membership. Although trading and market conditions will continue to be both difficult and highly volatile over the next year, I am confident that the business is well positioned to ride out the economic storm and will continue to grow and outperform many of our competitors.”
Commenting further Neil Kennedy, Chief Executive of Milk Link said:
“Despite extremely difficult trading conditions, particularly in relation to the cheese market, where the impact of imports of cheap cheese combined with deep and sustained discounting by the major Cheddar brands served to erode value from the market, the Group’s financial performance was strong.
“This reflected the strengthening of our customer & product mix; our continued emphasis on driving out costs and improving efficiencies across the business; and our rigorous approach to cash and stock management. This perhaps can be summed up by our determination, in everything we do, to ‘add value efficiently’. Indeed, given the ongoing economic and market pressures all in the dairy industry face, this will continue to be a constant mantra for the business.
“Looking forward, over the next 12 months the trading and economic environment will continue to be extremely challenging, whilst global dairy commodity markets will remain highly volatile. At the same time, although there are some welcome signs that farmer confidence is improving across the dairy industry, we must ensure that this is developed and sustained. This will be vital if we are to give farmers the confidence to make the necessary levels of investment in their dairy enterprises and to encourage the next generation of dairy farmers who will be the lifeblood of the industry.
“Our objective over the next year is to harness our increasing financial strength and strategic flexibility to further grow and develop. We will continue to take the necessary steps to strengthen and streamline our business. Above all, I believe that Milk Link still has a great deal of ‘latent potential’ to be unlocked and that we are well positioned to take advantage of the opportunities that will undoubtedly arise as the dairy market continues to go through a period of sustained and rapid change.”
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