National Milk Records Plc - Quarterly Update PR Newswire

For immediate release                                                                                                  

13 November 2018

NATIONAL MILK RECORDS PLC

(“NMR”, the “Company”, or, together with its subsidiaries, the “Group”)

QUARTERLY MARKET UPDATE FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2018

NMR, the leading UK supplier of dairy and livestock services, announces its unaudited market update for the three months ended 30 September 2018.

Highlights

    --  Turnover for the quarter of £6.083 million (September 2017: £5.166
        million)

    --  Herdwise, NMR’s screening service for the management of Johne’s disease,
        continues to be a key driver for growth, reaching a turnover of £1
        million for the quarter, an increase of 23% when compared to the same
        period last year

    --  10,000 Genomic tests completed for a trial of bovine TB index,
        delivering £0.2 million in the quarter

    --  The number of cows on the NMR database is 740,617 (September 2017:
        741,931)

    --  The number of cows on the Herdwise service is 407,551 (September 2017:
        362,026)

    --  NMR’s Laboratory Information Management System (“LIMs system”) is now
        live for Phase 1 of disease testing

    --  Following approval at the AGM, the Company is set to pay a 2.5p dividend
        on 23 November 2018; holders of 549,125 ordinary shares have elected to
        reinvest dividends totalling £13,728.12 under the Company’s Dividend
        Reinvestment Programme

    --  The Company is on track to deliver results in line with management
        expectations, and is well positioned to continue its positive trading
        into the new calendar year


Andy Warne, Managing Director, commented:

“I am pleased to announce this positive quarterly update - NMR has had a good start to its financial year. First quarter revenues have been boosted by the TB index genomic testing programme and by European grants supporting sales for heat detection systems in the summer. However, even if we exclude these benefits, the results still indicate the progress we are making at the Company.

“I note the modest increase in our core milk recording revenue albeit with a small reduction in the number of cows on the database. I am also pleased to report growth in our new areas of revenue potential, however, we continue to be absolutely focussed on delivering industry leading services in our core areas of milk recording and payment testing.

“The contract to deliver 10,000 Genomic tests to support the AHDB Dairy genetic index to improve resistance to bovine tuberculosis was announced last year, and NMR has successfully delivered the testing for this trial, boosting revenues in June 2018 and in the first quarter of this financial year. We are continuing to examine how we make further progress in increasing and supporting the market for genomic tests in the UK.

“I am also pleased to report increased traction with our internal investment programme, and I am confident of the flexibility, scale and efficiency that the Laboratory Information Management System and the digital transformation will bring to the business.

“The increasing demand from consumers to know more about their food and where it comes from, provides a favourable tailwind for NMR. We are well placed to provide a whole suite of services across herd production, management, breeding, health and welfare to support this trend and boost our revenues.

“It has been a good start to the year. However, it is important to note that the one-off nature of some of our first quarter revenues flatters the year on year comparison and we do anticipate a tightening of year on year performance in due course. Despite this, I am confident that NMR will continue to perform well for the rest of the year and I can look forward to updating the market on the Company’s progress in due course.”

Trading Update

Turnover from continuing operations for the quarter was £6.083 million. This figure was £0.917 million above the same period last year, an increase of 17.8%. NMR’s two cornerstone revenue streams of payment testing for processors and milk recording for famers, both showed a solid first quarter performance, growing slightly on the same period last year. The number of cows on the milk recording database has fallen slightly year on year following the impact of the summer drought and some farmers reducing herd size.

The key drivers for growth in the quarter were genomics testing, heat detection and Herdwise, NMR’s screening service for the management of Johne’s disease. The quarter was boosted by £0.2 million of revenue as a one-off contract for genomic tests of a bovine TB index, as well as some grant activity supporting the sale of £0.514million worth of heat detection systems under the Company’s strategic relationship with Antelliq. There were other positive developments in the quarter, particularly in the areas of Johne’s testing, blood testing for Bovine Viral Diarrhoea and antibiotic testing.

NMR’s Key Performance Indicators

    --  The number of cows on the NMR database is 740,617 (September 2017:
        741,931)

    --  The number of animals on the Herdwise service is 407,551 (September
        2017: 362,026)

    --  Laboratory turnaround time for the period was 2.0 days (September 2017:
        2.0 days)


Key Projects

Having delivered the first phase of its new LIMs system, the Company is now prioritising the plan for the evolution of LIMs across the whole suite of laboratory testing. In addition, NMR is running a process to select a partner for the implementation of Dynamics 365 from Microsoft across its Finance and Customer Management systems, as part of its digital transformation.

Outlook

NMR believes that Brexit, if anything, will be mildly positive for UK dairy and the Company, but there is some pressure in the near term on milk prices and it is not clear whether, and to what extent, the summer drought will have an impact on winter feed prices. Such squeezes may put pressure on farm finances in the near term, but the Company is on track to deliver results in line with expectations and is well positioned to continue its strategic development into 2019.

About NMR

NMR is the leading supplier of essential 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, Nordic Star, which services the UK dairy and beef sectors.

This announcement is available on the NMR website at www.nmr.co.uk

The Directors of the Company are responsible for the contents of this announcement.

For further information please contact:


National Milk Records plc
Andy Warne, Managing Director    +44-7970-009141
                                 andyw@nmr.co.uk

Mark Frankcom, Finance Director  +44-7458-002444
                                 markf@nmr.co.uk

Peterhouse Capital Limited      +44-20-7220-9796
Duncan Vasey
Mark Anwyl

Blytheweigh (Financial PR)      +44-20-7138-3204
Megan Ray
Rachael Brooks



Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.