First Milk’s group turnover has risen, and debt is down across the farmer-owned co-op, with its annual report and accounts for the year ending 31 March 2019 showing group turnover up 7.8% to £272.3m; operating pro?t at 2.6% of turnover; net debt down by £3.8m year-on-year; and net assets up by £4.4m.

“Over the last 12 months we have been focused on further strengthening and developing the business, with stable financial performance, efficient manufacturing, strengthened commercial relationships and, crucially, improved returns to members,” said chief executive Shelagh Hancock.

“After some dark times for the members of this farmer-owned business, First Milk has made year-on-year progress under Shelagh Hancock and her team,” said NFU Scotland milk committee chair John Smith, a First Milk supplier from Kintyre.

“It is a strategy that has seen them investing in more efficient and increased capacity, following through with a more competitive milk price for its members, along with a loyalty payment linked to shareholding. They have delivered a net profit in line with expectations of £2.6m, coupled with a net debt reduction of £3.8m.

“That progress has focussed on building key relationships with the likes of Ornua for cheese and a new strategic partnership with Havero Hoogwegt for whey proteins, as well as continuing to develop existing relationships with customers.

“However, the deeply disappointing closure of the creamery on Arran, along with the ongoing uncertainty around the creamery at Campbeltown, underlines that the First Milk board strategy has shifted away from relatively small scale speciality cheeses to heavily invested, industrial scale modern creameries aligned to key marketing partners. That strategy exposes the vulnerability of First Milk members in remote milk fields like Kintyre and Arran.

“The sad inability to find a buyer for the Arran Creamery shows the harsh market reality that the food industry faces. The hope remains that something can be achieved for the future of the Campbeltown creamery which has the support of First Milk, the Scottish Government and the local farmers.”