Dairy Farmers of Britain insists it is on track to turn a profit by 2009 to 2010, despite recording a £3.55m loss in its latest results.
Turnover in the year to 31 March was up 1% to £562m, as a result of higher milk prices. Though operating profit before exceptionals was £3.96m, the company recorded an after-tax loss of £3.55m, compared with £2.58m last year.
The farmer-owned company attributed the loss to disposals and restructuring costs and said the results were “exactly in line” with expectations. It hoped to break even within the next year and be in profit the following year, said chief executive Andrew Cooksey, adding that the loss had allowed it to return a more favourable milk price to members and secure long-term supply.
Although DFB’s milk price had already risen 47% to 25ppl in the year to March, further price rises were inevitable, he said. “There are significant inflationary pressures and I see a continuing inflationary marketplace,” he said, adding that it was impossible to say how high prices would go.
The company has now finished the first year of its three-year business plan to optimise customer profitability, cut costs and develop market opportunities. Cost-cutting measures included exiting Westbury Dairies in May and reducing the size of the DFB council, board and executive team.
There were plans to develop further retailer-specific lines in the wake of Tesco’s Localchoice milk deal, said Cooksey. The company also wanted to develop more value-added products and move away from a reliance on commodity products. NPD was likely to include further reduced-fat products and organic cheeses, he said.
This week, DFB also announced an £82m three-year financing package and the adoption of International Financial Reporting Standards – the first time a company in the UK dairy co-operative sector had adopted IFRS, it said.
Turnover in the year to 31 March was up 1% to £562m, as a result of higher milk prices. Though operating profit before exceptionals was £3.96m, the company recorded an after-tax loss of £3.55m, compared with £2.58m last year.
The farmer-owned company attributed the loss to disposals and restructuring costs and said the results were “exactly in line” with expectations. It hoped to break even within the next year and be in profit the following year, said chief executive Andrew Cooksey, adding that the loss had allowed it to return a more favourable milk price to members and secure long-term supply.
Although DFB’s milk price had already risen 47% to 25ppl in the year to March, further price rises were inevitable, he said. “There are significant inflationary pressures and I see a continuing inflationary marketplace,” he said, adding that it was impossible to say how high prices would go.
The company has now finished the first year of its three-year business plan to optimise customer profitability, cut costs and develop market opportunities. Cost-cutting measures included exiting Westbury Dairies in May and reducing the size of the DFB council, board and executive team.
There were plans to develop further retailer-specific lines in the wake of Tesco’s Localchoice milk deal, said Cooksey. The company also wanted to develop more value-added products and move away from a reliance on commodity products. NPD was likely to include further reduced-fat products and organic cheeses, he said.
This week, DFB also announced an £82m three-year financing package and the adoption of International Financial Reporting Standards – the first time a company in the UK dairy co-operative sector had adopted IFRS, it said.
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