NMR announces year end financial results 2013

National Milk Records plc, the ISDX-quoted leading supplier of dairy and livestock services, is pleased to announce its audited results for the year ended 31 March 2013. Additionally, the group gives notice of its AGM which will be held at Laches Close, Calibre Business Park, Four Ashes, Wolverhampton, WV10 7DZ on 25 September 2013 at 11.30am. For more information click here.

Chairman's Statement

The financial year ended 31 March 2013 has been a further year of progress for NMR. We have continued to build on the strong operational foundations started in 2012 whilst delivering growth in operating profit during the year. We also continue to develop both organic and step wise growth plans and believe we have significant future opportunities for growth within the agricultural sector where market demand for efficiency and provenance is increasing.

Following last year's investment programme to develop a new operational testing site at Four Ashes, Wolverhampton the consolidation process has continued with the closure and subsequent sale of the Harrogate laboratory site for £1,500,000. This resulted in redundancy costs of £246,000 but increased our cash position substantially. The integration of operations at Four Ashes and Hillington not only delivers efficiency but also enhances services and provides significant opportunities for development such as the new pregnancy testing service.

NMR operates through three divisions, which combine to create a wide reach across the various segments of the livestock industry. National Milk Records, our core business, provides management information to farmers about individual cow performance in terms of milk quality, yield and fertility. National Milk Laboratories is an independent milk testing division for milk buyers; and National Livestock Records provides support to the red meat industry, facilitating the growing requirement for traceability in this sector.

National Milk Records (‘NMR')

Milk recording remains the central service of NMR. NMR has been providing milk recording services since 1948 when in the post war era demand for food was a political imperative. The dynamics of the modern dairy market is less political but is driven by similar demands for greater production to feed a growing global population with an increasing taste for Western diets as well as the demand from UK retailers for greater food provenance.

The requirement for traditional milk recording has not changed since 1948 as farmers endeavour to improve the genetic worth and efficiency of their herds. However, the tools have improved and NMR is leading the innovation. Farmers now receive text alerts of health problems with individual cows, view daily trends in milk constituents on their smart phones and use genomic testing to forecast future productivity of a new born calf. As well as testing for diseases, which as a service is continually evolving, this year we launched a new pregnancy testing service and uptake has been solid to date. The farmer can use their milk records to demonstrate provenance of dairy products which has increased relevance following the 2013 horse meat scandal. We remain confident of further growth in both core and additional testing services.

National Milk Laboratories (‘NML')

NML continues to perform strongly, testing the quality of over 95% of milk in the UK before it is sold to consumers. There is increasingly consumer demand for higher levels of food provenance, quality and safety. NML works closely with its milk buyer customers such as Dairy Crest, Arla Milk Link, First Milk and Muller Wisemans to meet these demands.

We expanded our services into the Republic of Ireland in September 2010. Our proprietary payment testing business in Ireland is marketed and delivered through Independent Milk Laboratories Limited (‘iML'), a company that we have set up with Irish farming cooperative Progressive Genetics Ireland Limited. I am pleased to announce that iML is planning to be profitable and cash generative in 2013, with a number of growth projects in the pipeline.

National Livestock Records (‘NLR')

NLR continues to be both a source of revenue for the Group and potential future growth. Nordic Star, our ear tag distribution service, is now well established in its market place and it continues to perform well with year on year growth. Our work with the Welsh Government on The Technology, Agriculture and Greater Efficiencies Project (‘TAG') has been extended for 2013. This working partnership provides us with a base from which we plan to extend our services to the wider UK sheep industry.

Financials

I am pleased to report a substantial increase in the Group's operating profit to £698,000 (2012: £507,000) on an enhanced turnover of £18,828,000 (2012: £17,881,000). Our net cash balance has increased over the 12 month period by £1,167,000. During April 2013 NMR paid off £1,003,000 of debt.

For the third year, the Board recommends the payment of a dividend, having taken into account existing cash flow, capital expenditure commitments and the Company's prospects. A dividend of 2.2 pence per share is recommended to be paid on Friday 4 October 2013 to shareholders on the register on Friday 6 September 2013. The Ex Dividend date is Wednesday 4 September 2013. The total dividend amounts to £161,663.

Pension

NMR is one of five participating employers in the Milk Pension Fund. The Milk Pension Fund is a joint and several final salary scheme originally set up by the Milk Marketing Board. The Milk Pension Fund is now closed to all future accrual. We take our commitments to our pensioners and deferred pensioners seriously and we believe that our business plan will generate sufficient cash to allow us to invest in the growth of our business whilst agreeing with the Trustee a phased payment plan to meet the deficit in the fund. The recent settlement of the March 2012 pension fund valuation together with the agreed recovery plan gives NMR certainty for the next three years in terms of recovery payments to the Milk Pension Fund.

Outlook

NMR Group continues to make profits and deliver on our promises to shareholders and customers. We continue to make strong progress across our diverse portfolio of services and improve the efficiency of our operations. As a leader in the field, NMR is well positioned to capture the opportunities arising from the consolidating dairy market in both the UK and abroad as well as increased emphasis on food provenance.

Finally, I would like to thank our shareholders for their continued support during the challenging economic environment. I would also like to thank all our employees for their hard work during the year. They have once again showed exceptional commitment and I am confident given their depth of knowledge and NMR's supportive environment, we will be able to continue to perform well within our markets.

Philip Kirkham
Chairman

July 2013

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