National Milk Records plc

October 14, 2008 02:00 ET

Interim Results for the six months ended 30 September 2008

                              National Milk Records plc ('NMR' or 'the Company')

                                            Interim Results
National  Milk  Records  Plc, the PLUS-quoted supplier of milk services, is pleased  to  announce  its
trading results for the six months ended 30 September 2008.

    *       Net profit increased 469.35% to GBP353,000 (2007: GBP62,000)
    *       Turnover increased 10.6%  to GBP7,683,000 (2007: GBP6,946,000)
    *       Continued strong demand for services across dairy and livestock sectors
    *       National Milk Records remains acknowledged market leader in provision of dairy software in UK
    *       All major milk buyers in UK now contracting testing to National Milk Laboratories
    *       Strong milk price for suppliers using milk recording services increases service  demand
    *       Increased cash generation will enable expansion into new complementary services and markets

Chairman's Statement

This  has been another successful period for the Company as we strengthen our position as the  leading
provider of testing services to the UK dairy industry and increase our exposure and market penetration
in  livestock traceability.  Trading at our three divisions of National Milk Records ('NMR'), National
Milk  Laboratories  ('NML') and National Livestock Records ('NLR') has run ahead of budgeted  revenue,
margin and net profit, and we expect this strong performance to continue in the second half.

Our  business  plan remains focused on generic growth at profitable margins across all  three  Company
divisions.  The demand for our services in the dairy and red meat/livestock sectors remains strong and
through  the  introduction of technological innovation aimed at improving testing efficiencies,  yield
management  and  traceability techniques, we are maintaining our position  at  the  forefront  of  our

The  strong  performance  of  our  business, which is protected to a certain  extent  by  agricultural
legislation,  has significantly improved our balance sheet through the generation of  cash,  which  we
hope  will  enable  us  to facilitate our expansion into new complementary services  and  geographical


This division is our primary business.  NMR remains the leading supplier of milk recording services in
the  UK,  providing management information on individual cow's performance in terms of  milk  quality,
yield  and  fertility.  We are acknowledged by the industry as the market leader in the provision  and
support  of  dairy  software  in the UK and supply aggregate data to over  35  dairy  industry  bodies
including milk buyers, MDC Evaluations and breed societies.

Performance in this division has improved during the period and we now test in the region  of  795,000
cows  per  month.   Concern  over continuity of milk supply has led to a stronger  milk  price.   Some
retailers  have  made  milk recording a requirement in their dedicated supply contracts  to  encourage
sustainability of supply and this has lead to increased demand for our services.  This demand has been
enhanced  by  the continued move in the dairy industry to larger herds and with input costs  high,  an
increasing awareness among producers of the value of our recording services in improving efficiency.


All  of  the  major UK milk buyers now contract their testing to NML which provides a solid foundation
for  revenue and profit.  Current legislation governing food production demands the highest levels  of
hygiene  and  through  our laboratories and testing techniques, we allow our clients  to  comply.   We
provide  a wide range of analysis that helps to provide aggregate data of value to vets, research  and
educational organisations, feed producers and equipment manufacturers.  Expansion within the UK is for
additional  services, notably disease testing for both the producer at individual cow  level  and  the
supplier at herd level.  There is also increasing demand from the buyers for ad hoc testing.


There  is  a  demand in the UK for improved traceability of the movement of livestock,  continuity  of
supply  and  quality of red meat, improved efficiency of production and accurate data  collection  and
database management.  With our infrastructure, we believe that we can transfer our core competence  in
the  dairy  industry to the red meat sector and we are already deriving revenue and profit  from  this

Revenue in this subsidiary derives from data collection for sheep breed societies, distribution of ear
tags  to  dairy  and beef cattle, data collection and provision of information to sheep farmers,  RFID
traceability through the abattoir, and recently ultra-sound scanning of muscle and back-fat for  sheep
and cattle breeders.


We  have  had  a  strong performance over the period and I am pleased to report a net  profit  of  GBP
353,000  (2007:GBP 62,000) and turnover of GBP 7,683,000 (2007:GBP 6,946,000).  Our current plans  are
to  maintain  a strong balance sheet which we can utilise for expansion purposes when the  opportunity
arrives  and therefore we are not proposing to pay a dividend.  We expect to continue to show  monthly
profits  in our trading for the remainder of the year and build substantially on the profitability  in
the half year reported below.


Our  business  plan  will  pull  all these strands of business into a  comprehensive  service  to  the
industry.  We are at the forefront of our industry and we are looking to continue to expand our market
share.   With  all  three divisions performing ahead of expectation and under budget,  I  believe  the
second  half  will  again witness an improvement on last year's performance.  We are  operating  in  a
defensive  sector and believe that we offer a good investment opportunity both on an existing  revenue
analysis and on future growth prospects.

Finally, I'd like to thank all those involved with the Company for their hard work and I look  forward
to the future with confidence.

Philip Kirkham
10 October 2008

Summary Profit and Loss Account
For the 6 month period to 30 September 2008

                                                                   Unaudited figures for the                     
                                                                       six months ended              Year ended
                                                                    30-Sep-08         30-Sep-07         31-Mar-08
                                                                      GBP'000             GBP'000           GBP'000
NMR                                                                     6,057             5,628            11,294
Intercompany                                                            (276)             (261)             (539)
NML                                                                     1,762             1,501             3,193
NLR                                                                       140                78               208
                                                                        7,683             6,946            14,156
Operating profit /(loss) before exceptional items, interest                                                      
and goodwill amortisation                                                                                        
NMR                                                                       348               157               193
NML                                                                       114                52               155
NLR                                                                         8              (49)              (74)
                                                                          470               160               274
Exceptional items                                                                                           (108)
Goodwill amortisation                                                    (67)              (64)             (180)
Net interest                                                             (50)              (34)              (76)
Profit/(loss) on ordinary activities before tax                           353                62              (90)
Tax on profit on ordinary activities                                     (92)              (19)                24
Profit/loss) for the year                                                 261                43              (66)
Minority interest                                                                           (4)               (6)
Retained profit/(loss) for the year                                       261                39              (72)
Group statement of total recognised gains and losses                                                             
Profit for the financial year                                             261                39              (72)
Actuarial gain recognised in the pension scheme                                                             1,684
Deferred tax on pension scheme                                                                              (555)
Revaluation of land and buildings                                                                             398
Total recognised gains and losses                                         261                39             1,455

Notes to the Interim statements

1. Financial Information
The  interim  results  for  the six months to 30 September 2008 and 2007  are  unaudited  and  do  not
constitute  accounts within the meaning of section 396 of the Companies Act 2006. The interim  results
have  been drawn up using accounting policies and presentation consistent with those  applied  in  the
audited accounts for the year ended 31 March 2008. The figures shown for this year are taken from  the
financial statements.

2. Pension gains/losses
No  provision has been made in the six monthly accounts for actuarial gains or losses in  the  scheme.
These are accounted for at the year end in the light of actuarial considerations.

3. Dividends
The directors do not recommend payment of an interim dividend.

4. Copies of unaudited interim accounts
Copies  of this report are available from the registered office at Fox Talbot House, Bellinger  Close,
Greenways Business Park Chippenham, Wiltshire. SN15 1BN.

5. Responsibility
The  directors of the company accept responsibility for the information contained in the document  and
to  the  best  of their knowledge and belief (having taken care to ensure that such is the  case)  the
information  contained  in this document is in accordance with the facts and does  not  omit  anything
likely to affect the import of such information.

The directors of the Company accept responsibility for this announcement.
For further information visit or contact:

Chris Hughes                       NMR plc                                Tel: +44 (0) 1249 467 220
Duncan Vasey                       St Helen's Capital                     Tel: +44 (0) 20 7628 5582
Hugo de Salis                      St Brides Media & Finance Ltd          Tel: +44 (0) 20 7236 1177

Contact Information

  • National Milk Records plc