Medina reports improved financial and operational performance as it returns to profit

24 February 2017

 

“Despite a difficult market environment, I am pleased to report that Medina was able to grow its revenue and profit.” Sheazad Hussain, Chief Executive, Medina Holdings

Medina Holdings Limited (Medina), the major supplier of fresh milk, dairy and bakery products to the retail, convenience, wholesale and foodservice sectors, has published its report and accounts for the 52 week period ended 30 April 2016. In line with expectations the Group reported an improved financial and operational performance growing its revenue and returning to profit. It continued to make good progress in delivering on its long term strategic business plan focused on reviewing and reducing its underlying cost base, improving operational efficiencies and building its presence in areas that it considers will deliver sustainable and profitable revenue streams. With regards to the latter, the Group invested in further enhancing its capability to service the fresh milk & cream requirements of the major multiple retailers and in doing so developed strong foundations which the business has started to successfully leverage.

Highlights

• Group revenue: increased to £160.9 million (2015: £156.8 million) reflecting volume growth generated with existing customers, the full year effect of contracts that commenced during the prior year and the winning of new business. The improvement in revenue was despite the ongoing cross-sector deflation in dairy prices and the Group’s continued progress in the strategic realigning of its core business to improve customer mix.

• Group Earnings before interest, taxation, depreciation, amortisation and exceptional items: increased significantly to £3.7 million (2015: £2.0 million).

• Group profit: strengthened to £1.15 million against a loss in the prior year (2015: £0.89 million loss).

• Severnside fresh milk toll processing: In October 2015 Medina successfully purchased the Severnside fresh milk toll processing volume offered by Muller Wiseman Dairies. The agreement, which became effective from March 2016, to toll process 100 million litres of fresh milk at Severnside has enhanced Medina’s capabilities in the fresh liquid milk sector and is providing the Group with a strong base from which to accelerate its strategic goal of developing supply relationships with the major national retailers. Severnside is a flexible, strategically located and retailer approved fresh milk processing facility and complements Medina’s existing Grade A, British Retail Consortium accredited, production facilities at Watson’s Dairy, in Hampshire and Buckley’s Dairy in West Yorkshire.

Current year new business development

• In the current 2016/17 financial year Medina commenced the supply of fresh milk for Iceland from Severnside. It is now delivering a comprehensive range of British Red Tractor Farm Assured fresh milks direct to Iceland stores in the South West of England & South Wales.

• The start of the Iceland contract came shortly after the news that Medina had also been awarded a contract to supply fresh milk and cream from its Watson’s Dairy in Hampshire to a proportion of Sainsbury’s stores in the South of England which will commence from July 2017.

Commenting on the 2015/16 results, Sheazad Hussain, Medina Holdings Chief Executive said, “Despite a difficult market environment, I am pleased to report that Medina was able to grow its revenue and profit and we made further progress in improving our business efficiencies as a result of ongoing investment in our people and processes and through enhancing our customer mix.

“Medina’s long term business strategy is focused on increasing our share of the fresh liquid milk market in the UK, in particular through supplying larger national retailers. In this respect the acquisition of 100 million litres of fresh milk toll processing volume at the well invested Severnside dairy provides us with a strong base from which to accelerate the development of supply relationships with the major national retailers.

“Our Severnside processing capacity complements our existing strategically located fresh milk facilities and network of distribution depots and together provide us with the necessary operational infrastructure to service the needs of major retailers. We are delighted to have commenced supplying Iceland in the current financial year and that we will also start supplying Sainsbury’s from July 2017. ”