National Milk Records plc

November 02, 2009 02:00 ET

Interim Results


                       National Milk Records plc / Index: PLUS / Epic: NMR.P

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

                                          Interim Results

National  Milk Records plc, the PLUS-quoted leading supplier of milk services, is pleased to  announce
its unaudited interim results for the six months ended 30 September 2009.


*       Strengthened position as the UK's premier provider of milk services
*        Cash  generative  core  business  model  creating  strong  platform  for  geographic  and
    technological expansion
*        National Milk Laboratories building presence in Ireland - business increasing through key
    milk recording organisations in the region
*        Expansion of bovine ear tags service - developed high quality product to compete  in  the
    market place
*        Operating profit before exceptional items, interest and goodwill amortisation of £395,000
    (2008: £440,000)

Chairman's Statement

We  continue  to  maintain  our  position as the premier provider of  milk  services  in  the  UK,
generating  significant revenues which have translated into an operating profit before exceptional
items, interest and goodwill amortisation of £395,000 (2008: £440,000).

Our  milk  recording  and  payment  testing divisions, National Milk  Records  and  National  Milk
Laboratories have performed well, providing essential management information about herd  and  milk
quality to both the farmer and the milk buyer, which helps them produce high quality dairy produce
in a highly competitive and regulated market.  We believe that the cash generative nature of these
divisions  provides the Group with a strong platform and reputation from which to  further  extend
our business into complementary industries.

With  this  in mind, our exciting disease testing services are being well received throughout  the
industry and our newest division, National Livestock Records, is also gaining momentum as it gains
a  foothold  in  the ear tagging business as well as animal ID and traceability in  the  red  meat
sector.   We continue to explore other new products and opportunities to extend the reach  of  our
business for the benefit of both our customers and shareholders.

National Milk Records

National Milk Records is the mainstay of our business, currently providing milk recording services
to  50 percent of UK farmers.  As described in our preliminary report, we recognise the importance
of  technological  development in adding value to this division, and we continue  to  develop  new
tests to extend the range of diseases we are able to detect for our customers.

With expansion in mind, during the last six months we have started to make steps towards extending
our  geographic reach and continue to explore our position and potential in Ireland and  Scotland.
Further  afield,  we  have also been conducting and evaluating a selection of  small  ventures  in
Kosovo, Botswana and Indonesia.

National Milk Laboratories ('NML')

NML  provides  payment testing services to a number of blue-chip milk buyers to ensure  that  milk
quality  is high and disease is detected before it is sold to consumers.  During the period  under
review, NML has seen a significant increase in business from Ireland, with samples being submitted
from two key milk recording organisations - Progressive Genetics Co-Operative Society Limited  and
Munster  Cattle  Breeding  Society  Limited.  NML has also undertaken  disease  testing  work  for
Moorepark Technology Limited, a major dairy research centre in Southern Ireland.

Moving  forward, NML will be looking to utilise its emerging presence in Ireland  to  enlarge  its
share  of the disease testing market during 2010, whilst also focussing on its core market in  the

National Livestock Records ('NLR')

As  reported in our preliminary results, NLR is a relatively new part of our business.  During the
last  six months we have been taking steps to generate higher margins in NLR through the expansion
of  our  bovine ear tag service and the development of animal ID and traceability in the red  meat

We  believe  that our ear tag distribution service is well placed to benefit from  EU  legislation
ruling  that  all  sheep  under  its  jurisdiction must be electronically  tagged  for  monitoring
purposes.   In line with this, we have continued to develop our product to ensure its  quality  is
maintained to the highest standard in a competitive market.

We  have  also  made  progress in increasing our presence in the red meat sector  as  we  build  a
reputation  as  providers  of  traceability solutions.  This  division  has  benefitted  from  our
experience and reputation in the dairy industry.  As announced in October 2009, we have received a
grant  to  develop a detailed flock management system for sheep farmers in Wales as  part  of  the
Technology,  Agriculture  and Greater Efficiencies Project, administered  by  the  Welsh  Assembly
Government.    This  is  a  project that we have been working on over the past  three  years  with
Sainsbury's Plc and Dunbia Wales Limited and we anticipate that this will help progress our  plans
to extend our core competence in database management from dairy into the red meat sector.


Investors  in  NMR will be aware of the disproportionate size of our final salary pension  scheme.
The pension is relatively well funded but with the unprecedented low level of the stock market  on
31  March 2009, we already know that our year end figures for 31 March 2010 will be affected by  a
large  FRS17 interest charge.  Half of this charge is reflected in the six month statement.  These
figures  do  not  correspond  to  cash; although they do act as a  reminder  that  we  do  have  a
significant pension deficit in our fund.

NMR  has already closed the fund for future accrual and we continue to work with the trustee on  a
plan  to  reduce  and  ultimately eliminate this deficit.  Estimates vary,  but  approximately  25
percent  of  the  deficit will have already disappeared due to improving investment  values  since
March 2009 although the FRS17 notional charge reflects the historical investment value.


Despite  a  significant  bad  debt  created  by  Dairy  Farmers  of  Britain  Limited  going  into
administration, the business is on budget at the end of September 2009 and the Board of NMR remain
confident about delivery of its business plan.

Due to the FRS17 interest charge as mentioned above in relation to the pension scheme, the Group's
financial  results  for the six months to 30 September 2009 show a net profit  of  £82,000  (2008:
£353,000) on a turnover of £7,942,000 (2008: £7,683,000).


Our  focus  is  to  strengthen our core operations across the UK and deliver on  our  strategy  of
expanding  the  Group's  offering to existing and prospective clients  through  technological  and
geographical  expansion.    We have established a cash generative business  model  which  provides
those operating in the dairy industry with an innovative and premium service to aid the running of
their businesses.  With this background, our management team is always actively searching for  new
opportunities to expand and improve our operations and increase our value both to the customer and
to our shareholders.

Our  geographic  expansion  continues to gain momentum with  particular  progress  being  made  in
Scotland and Ireland.  We are excited about the future potential of our various divisions and look
forward to updating the market on our progress on a regular basis.

Philip Kirkham
2 November 2009

Summary Profit and Loss Account
For the 6 month period to 30 September 2009
                                                          Unaudited figures for the            
                                                                six months ended                     Year ended
                                                           30-Sep-09           30-Sep-08              31-Mar-09
Turnover                                                   £000                   £ '000                  £'000
NMR                                                            6,192               6,057                 12,112
Intercompany                                                   (276)               (276)                  (560)
NML                                                            1,874               1,762                  3,537
NLR                                                              152                 140                    277
                                                               7,942               7,683                 15,366
Operating profit /(loss) before exceptional items, interest and                                
goodwill amortisation
NMR                                                              291                 318                    564
NML                                                              107                 114                    196
NLR                                                              (3)                   8                   (62)
                                                                 395                 440                    698
Exceptional administration expenses                             (47)                  30   *   
FRS 17 interest                                                (137)                (18)   *               (34)
Goodwill amortisation                                           (94)                (67)                  (201)
Other interest                                                  (35)                (50)                  (118)
Profit/(loss) on ordinary activities before tax                   82                 335                    345
Tax on profit on ordinary activities                            (57)                (92)                  (110)
Profit/(loss) for the year                                        25                 243                    235
Group statement of total recognised gains and losses                                           
Profit for the financial year                                     25                 261   *                235
Actuarial gain recognised in the pension scheme                (452)             (1,120)   *            (2,241)
Deferred tax on pension scheme                                   121                 301   *                602
Total recognised gains and losses                              (306)               (558)                (1,404)

* Not disclosed in last year's statement

Notes to the Interim Statements

1. Financial Information
The  interim  results for the six months to 30 September 2009 and 2008 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 2009. The figures shown for this  year
are taken from the financial statements.

2. Exceptional administrative items
In  2008  the  sales  of  fully depreciated commercial vehicles to be replaced  by  contract  hire
amounted  to  £30k. This was included with the reported net profit. In 2009 we have  offered  some
deferred pensioners and enhanced transfer value in return for transferring their pension from  the
fund costing £12k in the period.

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 Group 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 are responsible for the contents of this announcement

For further information visit or contact:
Chris Hughes                   NMR plc                                      Tel: +44 (0) 1249 467 220
Duncan Vasey                   St Helens Capital Partners LLP               Tel: +44 (0) 20 7628 5582
Mark Anwyl                     St Helens Capital Partners LLP               Tel: +44 (0) 20 7628 5582
Hugo de Salis                  St Brides Media & Finance Ltd                Tel: +44 (0) 20 7236 1177
Elisabeth Cowell               St Brides Media & Finance Ltd                Tel: +44 (0) 20 7236 1177

Contact Information

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