Processors

Arla Foods UK achieved turnover of nearly £1.4billion - the highest of the three largest processors in the UK. However, pre-tax profits, return on sales and return on capital were all below those reported by Dairy Crest and Robert Wiseman Dairies. Dairy Crest achieved the highest return on sales, return on capital and return per litre of milk processed at 3.01pence per litre (ppl). Wiseman's return per litre of milk processed was 2.06ppl, while Arla's was 0.67ppl. Care should be taken however when comparing companies on a pence per litre basis due to the different activities engaged in by the different companies.

Dairy Crest has experienced a significant increase in pre-tax profits between the 2004 and 2005 financial year. However, Robert Wiseman Dairies has experienced a £4.5m fall in pre-tax profits over the same period. No meaningful year-on-year comparisons can be made with Arla's financial results as the results announced in 2004 refer to an 18-month period, including the period prior to the merger with Express Dairies.

Company Results refer to 2004/05 financial year	Turnover (£000)	Profit (£000)	Return on Sales %	Return on CAPITAL %	Return pence per litre*
ARLA FOODS UK	1,374,100	14,700	1.07%	10.24%	0.67
DAIRY CREST	1,260,600	66,200	5.25%	24.28%	3.01
ROBERT WISEMAN DAiries	489,168	24,684	5.05%	22.96%	2.06

Co-operatives

Both Dairy Farmers of Britain and First Milk have increased their pre tax profits and return on sales in the 2004/05 financial year compared to the previous financial year. However profit figures include the capital retention payments collected from members. If capital retention payments were excluded, retained profits for the year would be significantly lower.

Return on capital for all three co-ops has fallen over the past financial year. This is likely to be due to the significant investment in capital undertaken by all three co-ops over the past year. For example; Milk Link has experienced the smallest increase in the value of net assets of 38%.

Company Results refer to 2004/05 financial year	Turnover (£000)	Profit (£000)	Return on Sales %	Return on CAPITAL %**
Dairy Farmers of Britain *	594,135	16,946	2.85%	48.32%
fIRST MILK	504,760	6,845	1.36%	27.21%
MILK LINK*	651,139	5,958	0.92%	20.01%

* Please note that capital retention is accounted for in these two companies profit and loss account rather than the balance sheet .Taking this into account the retained profit/loss for the financial year is as follows: Milk Link -£2,017,000. Dairy Farmers of Britain £36,000. Therefore on this basis return on capital will be very low.

Please note:
Where profits are referred to, this relates to pre tax profits i.e. net of all charges but tax, pre tax profits are also used to calculate Return on Sales and Return on Capital.

Return on Sales: pre tax profits expressed as a percentage of turnover. The higher the percentage the greater the profitability of the company.
Return on Capital: pre tax profits expressed as a percentage of the net assets of a company. It is a measure of the earning power of the assets invested within a company.
Return pence per litre: pre tax profits expressed on a pence per litre basis, based on companies co-ops published information relating to how much milk they process (where this information is not available estimates have been made).