For immediate release
("NMR", the "Company", or, together with its subsidiaries, the "Group")
QUARTERLY UPDATE FOR THE THREE MONTHS ENDED
§ Turnover for the quarter of
§ Revenues for testing of Johne's disease increased by
§ Similarly, revenues for testing for other diseases other than BVD increased by 75.0%
§ Revenues in core services such as milk recording, payment testing and BVD testing declined marginally as the business recovered from the RYUK cyber-attack in the previous quarter
Andy Warne, Managing Director, commented:
"I am pleased to announce this positive quarterly update in the midst of a very traumatic period for both the UK dairy sector and society generally. Meaningful analysis of our trading position in this snapshot in time is difficult because during this quarter NMR was both recovering from the RYUK cyber-attack and beginning to feel the effects of Covid-19. However, the results do show that even under significant external influences our ability to deliver services essential to the food production sector are robust. It is only a matter of weeks ago that the biggest topic of conversation was Brexit. Despite recent misleading media reports, our view of the UK dairy sector remains positive. The closure of various service-sector milk channels (coffee outlets and restaurants) resulted in c.0.6% of one week's worth of milk supply being tipped away over 2 days, however we have already seen a re-balancing of the supply chain and we believe the UK dairy sector and food supply sector generally are positively positioned for both the medium term uncertainty and in the coming years. As society reviews its priorities following Covid-19 we believe food security and food provenance will become even higher on the public's agenda.
"I want to thank all the staff who work at NMR who have maintained our operational readiness throughout the Covid-19 lockdown such that NMR has maintained an overall position of being open for business to ensure our service levels with key customers are maintained."
Turnover for the third quarter was
NMR is a stronger and more versatile business following the RYUK cyber-attack in the previous quarter. This has enabled the response to the Covid-19 lockdown to be proactive in the final days of this reporting quarter. Payment and disease testing operations have continued largely as normal and c.20% of recording customers have switched to a "Do it Yourself" ("DIY") service option where social distancing was difficult to implement on-farm during the sampling process, reflecting the essential nature of the milk recording service. NMR expects a proportion of these customers to switch back to a full recording service once lockdown measures are eased.
In each of NMR's customer sales channels, whether farmers, processors or third parties such as retailers, cash flow is following normal business practice.
The largest project for 2020 is the implementation of Microsoft Dynamics 365. The scope of this project covers systems for finance and customer engagement, including reporting against the customer prospects pipeline and financial analysis across customer and product / service groupings. As well as replacing existing outdated systems, we expect the benefits to the business in terms of flexibility, efficiency and analysis to be significant. The project remains on track for Phase 1 implementation by the end of 2020.
In addition, NMR continues to invest in other new equipment and technology in its laboratories.
Following the outbreak of Covid-19 any outlook must be caveated with a degree of uncertainty however the supply of staples such as dairy products remains a predictable and robust market sector. There is short term pressure on the UK dairy sector as we anticipate the food service sector will remain disrupted for the remainder of 2020. The impact of Brexit was an uncertainty prior to Covid-19 but our forecast remains that this will be mildly positive for NMR in the medium term.
It remains our advice to investors that we cannot give any specific guidance on the financial impact of Covid-19 for the fourth quarter due to the dynamic nature of the situation and its potential impact on both revenue streams and resource availability.
Management remain positive about the long term robustness of the business and opportunities for future growth.
For further information please contact:
Andy Warne, Managing Director email@example.com
Mark Frankcom, Finance Director firstname.lastname@example.org
Adam James +44-20-7523 8000
Blytheweigh (Financial PR)
Rachael Brooks +44-20-7138-3204
This announcement is available on the NMR website at www.nmr.co.uk
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014.
The Directors of the Company are responsible for the contents of this announcement.
NMR is the leading supplier of management information to the UK dairy supply chain. Through a team of self-employed milk-recorders, it collects and tests milk samples for approximately 50% of the UK's two million cows. In addition, its laboratories provide payment testing and disease testing services for Britain's milk processors. NMR has a joint-venture laboratory in the Republic of Ireland providing similar services to farmers and processors across the whole of Ireland. Another division of the Group is a livestock traceability business,
This information is provided by RNS, the news service of the