12 months into the turnaround of First Milk, Mike Gallacher and the First Milk Board have been briefing co-op members at meetings across the UK this week. While the industry outlook remains hugely challenging, the team has reported strong progress against the plan outlined in 2015.
Over this period the business has made major changes in its strategic direction, governance and leadership, putting a focus on its 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. Combined, this has delivered a return to operating profit at year end.
The business now expects to deliver an operating profit (before restructuring costs) of £4m for the year to 31 March 2016, versus a loss of £20M for the prior year. At the same time, the debt of the business has reduced to £33M from a peak of £84M in 2014/15.
First Milk’s CEO Mike Gallacher reported to members “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.”
