National Milk Records (LON:NMRP) chairman Philip Kirkham says the outlook for remains positive for future revenue and margin growth at the company.
The plus-quoted company is 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. This information is supplied to farmers, industry bodies and to major supermarkets such as Tesco, Sainsbury and Marks and Spencer.
“NMR remains profitable and we continue to achieve increased turnover year on year, although we look forward to building upon this in the future,” Kirkham said.
This morning it reported its interim results, for the six months ending September 30 2011, which showed a 3.9 per cent increase in turnover to £8.64 million. The profit for the period was £347,000, down from £407,000 in the same period of last year
The company said that profitability is being affected by its significant investment in new projects and the re-organisation cost associated with the construction of its new laboratory, in Staffordshire.
These costs will deliver additional revenue and increased operating margin in the future, it added.
NMR has been working on new initiatives to diversify and develop the business. This morning it explained that a number of these new revenue streams are beginning to deliver results.
A new joint venture has been set up in Ireland and it got off to a positive start by trading profitably over the summer.
It also launched a new product, called the Silent Herdsman, recently. NMR said that turnover growth has been slower than hoped for the product so far but a new distribution agreement with a national genetics company should facilitate improved growth going forward.
Another new initiative sees NMR provide a new testing service to Marks and Spencer, in which it differentiates between saturated and unsaturated fat in milk.
“I am pleased to report a successful increase in turnover of 3.9 per cent for the period despite the challenges which remain in the overall UK dairy market place,” Kirkham said.
“Although the medium term forecast for the milk price paid to farmers is favourable, in the short term production cost on dairy farms has led to a squeeze on cash flow.
He added: “Selling new products in this environment is challenging but I have been pleased with our success to date and optimistic for future growth.”