National Milk Records plc

November 12, 2014 02:01 ET

Interim Results

                                                                                            12 November 2014
                             National Milk Records plc ('NMR' or the 'Company')
                                               Interim Results

National  Milk Records plc, the ISDX-quoted leading supplier of dairy and livestock services, is pleased  to
announce its interim results for the six months ended 30 September 2014.

                 *       4.5% increase in turnover to GBP9,719,000
                 *       29% increase in operating profit to GBP850,000
                 *       Sales of value-accretive products, such as pregnancy testing, Johne's and BVD testing, 
                         continue to grow
                 *       Product offering bolstered by the post period end acquisition of Inimex, which
                         operates as

NMR's  Managing Director Andy Warne said, "We are delighted to announce a significant increase in  both  our
half  yearly  revenues and operating profits. This is a result of organic growth achieved by offering  dairy
farmers  incremental  services  that  are proven to add value, and by streamlining  our  business.   We  are
focussed  on  driving  efficiencies and growth in UK dairy farms through the provision of  highly  effective
management  data.   With  this in mind, at post period end we bolstered our existing  offering  through  the
highly  synergistic  acquisition of Iminex, which operates and is  regarded  as  a  good
value,  high  quality  provider  of bull semen. By leveraging our existing milk  recording  business,  which
currently tests 60% of the milk produced in the UK, we are confident that NMR is well positioned to increase
Iminex's  current  market  share  through  our  existing relationships  with  farmers.  Notwithstanding  the
challenging  macro  conditions across the dairy sector, the forthcoming months  will  see  us  complete  the
transition  related to the acquisition and formulate a solid growth strategy, as we look  to  drive  further
growth across our business."

Chairman's statement
I  am pleased to report that NMR's Group core activities continue to develop additional revenue, margin  and
cash.  NMR's results for the six months ended 30 September 2014 show increasing turnover and profit compared
to  the  same  period  last  year. Revenue has increased to GBP9,719,000 up  4.5%  from  last  year  with  a
corresponding 29% increase in profits.

Between  1  April 2014 and 30 September 2014, the UK and Irish dairy sectors showed excellent macro-economic
conditions  with  positive cash generation on-farm. The management information and health  testing  services
that we provide are largely viewed as essential services for a modern dairy farm and as such demand does not
fluctuate  based on the overall dairy market economic dynamics.  Therefore, we are pleased to attribute  our
improved  performance to our own efforts in organically growing the business by providing additional  value-
accretive  services  which  add productivity to the UK dairy sector, and by continuing  to  drive  efficient
However, we have noted that the short term outlook for dairy farming economics is far tighter as the reduced
global  demand for dairy products affects commodity prices and for this reason, the NMR Board is  showing  a
degree of caution in planning the next 12 months of operations.
National Milk Records (NMR)
In  line with our organic growth strategy, turnover in the recording business continues to increase based on
added  value services such as pregnancy and disease testing. Both Scotland and Northern Ireland continue  to
provide development opportunities due to our historically lower market share in these territories.

National Milk Laboratories (NML)
Our  testing  division,  National  Milk Laboratories ('NML'), continues  to  drive  economies  of  scale  in
laboratory services by processing 100% of all liquid milk sold in the UK for disease and quality and 60%  of
the milk recording testing in the UK.

We  have  experienced double digit growth in turnover and margin, generating greater testing volumes  whilst
fixing our costs.

National Livestock Records (NLR)
Growth  in NLR, a division focussed on transferring our core capabilities in the dairy industry to  the  red
meat  sector,  is principally based on tissue tags for the BVD control programmes in Scotland  and  Northern
Ireland.  We have also launched a new initiative to sell statutory identification tags via our milk recorder
field force which we hope will be fruitful going forward.

Independent Milk Laboratories (iML)
iML  has  continued to grow over the period based on new payment testing clients from Northern  Ireland  and
continued revenue development in line with growth of our cornerstone client, Lakeland Diaries.

For  the  period  under review the Group is reporting a 29% increase in its operating profit  to  GBP850,000
(2013: GBP657,000) on an increased turnover of GBP9,719,000 (2013: GBP9,308,000)

The  pension statement in this Interim Statement is a re-statement of the position as of 31 March 2014.  The
Board  estimates that based on the latest information on asset levels, liabilities and discount  rates,  the
funding level will be largely unchanged. A full calculation will be carried out for the year ending 31 March

Lower  global  commodity  prices and the Russian ban on EU dairy products are driving  the  price  of  dairy
products down and a 12 month squeeze on margins is forecast for UK dairy farmers and processors alike.  Most
UK  farmers  can  look through this lean period, as the overall medium term forecast for  dairying  is  more
positive. This short term squeeze will demand efficiency of milk production and processing and NMR  believes
it  has  the services required to help deliver these efficiencies. The essential nature of our core services
and the general sector focus on improved animal welfare and increased provenance of food products means that
we  are  confident  in  our business model going forward, despite the fact that we  expect  general  trading
conditions in the dairy sector to be challenging in the next 12 months.

Post  period  end,  NMR  completed the acquisition of Iminex, which trades in the UK  as  is  well  regarded  for providing high quality, good value products  via  its  efficient  and
technically  skilled  telemarketing operation. In the past two years NMR has succeeded  in  developing  more
margin  through  efficient savings in operations, and the acquisition of Inimex gives us the opportunity  to
grow margin and cash based on a new revenue steam in an allied sector.

Nick  Kirby, Managing Director of Inimex has joined the NMR Board as an Executive Director and  we  will  be
working  with  Nick  to  formulate the integration and growth plans to ensure the  Inimex  acquisition  adds
shareholder value whilst maintaining a focus on our core services.

I  would  like  to  take this opportunity to thank our shareholders and team for their  support  during  the

Philip Kirkham

                                     Summary Profit and Loss Account
                                     Unaudited Figures for the                                  
                                      Six Months Ended               Six Months Ended           Year To
                                      30th September 2014              30th September           31st March
                                                                           2013                   2014
                                              GBP '000                     GBP '000            GBP '000
NMR                                              7,973                     7,596              15,332
Less Share of Joint Venture turnover              (333)                     (257)               (545)
Less Intra Group turnover                       (2,052)                   (1,914)             (3,916)
NML                                              3,747                     3,614               7,132
NLR                                                384                       268                 664
                                                 9,719                     9,308              18,667
Operating profit/(Loss) before exceptional                                                                     
items, Interest and goodwill amortization                                                                             
NMR                                                209                       150                 216
Share of operating profit of Joint Ventures         78                        54                  88
NML                                                508                       413                 773
NLR                                                 55                        40                 113
                                                   850                       657               1,190
Exceptional Administration Expenses                  -                      (122)               (257)
FRS 17 Interest                                      -                        75                 263
Goodwill Amortization                                -                         -                   -
Other Interest                                       -                        (7)                (13)
Profit on Ordinary Activities                      850                       603               1,183
Tax on Profit on Ordinary Activities              (179)                     (139)               (485)
Profit for the period/year                         672                       464                 698

                                                 Consolidated Balance Sheet                                   
                                              Unaudited Figures for the periods
                                    30th September 2014                30th September          31st March
                                                                            2013                  2014
                                          GBP '000                         GBP '000              GBP '000
Fixed Assets                                                                                                                
Intangible Assets                             -                               30                   - 
Tangible Assets                             2,981                          3,536               3,185
Investments                                   292                            181                 214
                                            3,273                          3,747               3,399
Current Assets                                                                                                              
Stock                                         281                            521                 244
Debtors                                     1,759                          1,629               1,848
Cash at Bank                                2,471                            763               1,443
                                            4,511                          2,913               3,535
Amounts falling due within 1 year          (3,157)                        (2,747)             (2,763)
Net Current Liabilities                     1,354                            166                 772
Total Assets Less Current Liabilities       4,627                          3,913               4,171
Amounts falling due after more than 1 year   (536)                          (625)               (452)
Provisions for liabilities                   (286)                          (182)               (342)
Pension Liability                          (6,307)                        (4,193)             (6,602)
Net (Liabilities)/Assets                   (2,502)                        (1,087)             (3,225)
Capital And Reserves                                                                                                        
Called Up share Capital                       752                            735                 742
Share Premium                                  66                              -                  25
Share Option Reserve                           22                             20                  22
Profit and loss account                    (3,342)                        (1,842)             (4,014)
                                           (2,502)                        (1,087)             (3,225)

The Directors of the Company are responsible for the contents of this announcement.

For further information on NMR, please visit
Enquiries to:

National Milk Records Plc
Andy Warne                                               Tel: +44 (0) 7970 009141

Peterhouse Corporate Finance Limited
Duncan Vasey or Mark Anwyl                               Tel: +44 (0) 20 7220 9796

St Brides Media & Finance Ltd
Elisabeth Cowell/ Hugo de Salis                          Tel: +44 (0) 20 7236 1177

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