NMR bolstered by bull semen supplier ahead of tough year for dairy sector

THE acquisition of a leading bull semen supplier is set to bolster National Milk Records as it prepares for a tough year ahead, its managing director has said.

The ISDX-quoted supplier of dairy and livestock services, which has an operation near Wolverhampton, acquired Iminex last month.

NMR managing director Andy Warne said in the firm’s interim results statement that the business remained focussed on driving efficiencies and generating growth by supplying the UK dairy sector with highly effective management data.

“With this in mind, at post period end we bolstered our existing offering through the highly synergistic acquisition of Iminex (which operates as www.bullsemen.co.uk) and is regarded as a good value, high quality provider of bull semen,” he said.

“By leveraging our existing milk recording business, which currently tests 60% of the milk produced in the UK, we are confident that NMR is well positioned to increase Iminex’s current market share through our existing relationships with farmers.  

“Notwithstanding the challenging macro conditions across the dairy sector, the forthcoming months will see us complete the transition related to the acquisition and formulate a solid growth strategy, as we look to drive further growth across our business.”

Chairman Philip Kirkham said that the sector was likely to be characterised by lower global commodity prices and the Russian ban on EU dairy products, which together are driving the price of dairy products down. The result is likely to see a 12-month squeeze on margins for already hard-pressed dairy farmers and processors alike.  

“Most UK farmers can look through this lean period, as the overall medium term forecast for dairying is more positive. This short term squeeze will demand efficiency of milk production and processing and NMR believes it has the services required to help deliver these efficiencies,” he said.

“The essential nature of our core services and the general sector focus on improved animal welfare and increased provenance of food products means that we are confident in our business model going forward, despite the fact that we expect general trading conditions in the dairy sector to be challenging in the next 12 months.”

The firm’s results for the six months ended September 30, 2014 show a 4.5% increase in turnover to £9,719,000 (2013: £9,308,000). This helped generate a 29% increase in operating profit to £850,000 (2013: £657,000).