Gallacher completes First Milk turnaround

In April this year, Mike Gallacher quietly stepped down as chief executive of First Milk, the farmer-owned dairy co-op headquartered in Scotland. During his two years in charge, Gallacher led a radical restructuring of the dairy co-op, which had run into financial difficulty in recent years and was paying some of the weakest milk prices to farmers.

Gallacher handed over the reins of First Milk after completing the turnaround in the business and left the co-op with healthy profits after his final year in charge. Accounts released this week by First Milk show the co-op recorded pre-tax profits of £6.5m for the financial year to the end of March 2017. This compares with pre-tax losses of £3.4m incurred the previous financial year.

Weaker dairy markets and lower volumes saw sales decline a substantial 30% during the year to £206.5m. However, the restructuring carried out over the last two years has made First Milk a much more profitable business.

Operating profits for the 2017 financial year increased nine-fold to £9.4m, with profit margins recovering strongly to a very healthy 4.6%. Net debt in the business increased 17% to stand at £37.6m at year-end.

First Milk chair Clive Sharpe described the 2017 financial year as a “year of two halves”, with milk prices increasing 9p/l during the year. First Milk has long-term contracts supplying fresh milk to Nestlé UK and Ireland, as well as a cheese supply partnership with Tesco and Ornua Foods.