MILK Link, which has a large part of its operation based in Church Lane, Crediton, has had a successful year of trading.

Wholly owned by British dairy farmers, it was the Crediton dairy which benefited substantially during the year, unfortunately at a loss to another dairy in the UK, which closed.

Milk Link undertook a strategic refocusing of its long life milk and cream and flavoured milks business during the year.

Integral to this was the closure of its Kirkcudbright facility and consolidation of all milk production to its Crediton dairy.

The latter benefited from a major capital investment programme to create the most advanced production facility of its type in the UK.

In the year ending April 3, 2010, Milk Link's turnover increased from £547 million in 2009 to £550 million (+0.5 per cent); earnings increased from £28.7 million in 2009 to £29.2 million (+1.7 per cent) and profit before tax increased to £10.6 million from £0.5m in 2009 (in part reflecting the strategic reviews which took place in the prior year which led to exceptional charges of £9.6 million).

Profit attributable to members was £10.1 million.

As well as the expansion of the Crediton dairy, other highlights of the year included the acquisition of the Llandyrnog Creamery in North Wales.

Commercial highlights included continuing to build its brand business by major customers - Sainsbury's, Waitrose, Tesco, Marks and Spencer, Morrisons, Iceland and the Co-op; production of a range of new cheeses and milk products, including the cheddar, Tickler, which is produced at the Taw Valley Creamery at North Tawton.

The quality of Milk Link's cheeses was again recognised by the industry with the winning of a record 182 awards during the year.

Commenting on Milk Link's performance Ronnie Bell, Milk Link chairman said: "Milk Link continued to make good progress over the year as we strengthened both financially, structurally and commercially and made strong progress towards our objective of becoming the UK's leading added-value dairy processing business.

"We are now a national business with a growing market presence and reputation for producing high quality innovative products and delivering excellent service levels. We have an increasingly supportive membership, growing national milk pool and deepening relationships with an impressive list of strategic customers.

"We are focused on continuing to develop the business and returning the benefits to our membership. Although trading and market conditions will continue to be both difficult and highly volatile over the next year, I am confident that the business is well positioned to ride out the economic storm and will continue to grow and outperform many of our competitors."

Commenting further Neil Kennedy, chief executive said: "Despite extremely difficult trading conditions, the group's financial performance was strong."

He continued by saying that the next 12 months "will continue to be extremely challenging".

He ended: "Our objective over the next year is to harness our increasing financial strength and strategic flexibility to further grow and develop. We will continue to take the necessary steps to strengthen and streamline our business.

"Above all, I believe that Milk Link still has a great deal of 'latent potential' to be unlocked and that we are well positioned to take advantage of the opportunities that will undoubtedly arise as the dairy market continues to go through a period of sustained and rapid change."

Following the report of the year, Milk Link announced a 0.75 pence per litre (ppl) increase in its member milk price effective from July 1, 2010.

The increase means that Milk Link's standard litre price for manufacturing milk will be 24.5ppl and for liquid milk 24.72ppl.

Milk Link has also announced, an on average, 0.5ppl increase in the price paid for milk supplied by its non-member "direct" dairy farmers effective from July 1, reflecting the general improvement in market returns.

Alan Quick