Soaring interest payments on its liabilities reversed the benefit of revenue growth across all of National Milk Records’ divisions and resulted in the group reporting a 53% fall in full-year earnings per share to 1.6p.

In results for the year to 31st March 2010 the dairy and livestock services provider reported a 3.4% increase in turnover to £15.9 million on gross margins that were 140 basis points lower at 24%. But even though falling administrative expenses helped offset the year-on-year decline in gross profits a massive 106% increase in interest payments to £0.32 million resulted in the worsening bottom line performance. No dividend was declared for the year.

At the 2010 year-end the group’s balance sheet was in a better position but remained far from being in the pink of health. Net current liabilities as at 31st March 2010 stood at £0.51 million, down from £0.72 million. The group’s pension deficit was 14.3% lower at £2.18 million but still large for a company currently capitalised at £2.17 million. No cash flow statement was published with the accounts.

Since the year-end the company has secured an agreement to distribute fertility monitoring device, Silent Herdsman, which assists farmers in improving the monitoring of their livestock’s reproductive health and thereby boost farm productivity. Commenting on its future growth plans the company hopes to expand the presence of its PCR testing facilities (which boosts both its milk recording and payment testing abilities) in laboratories as it believes the disease detection advantages offered are being increasingly noticed by the industry. In the long-term the group is also looking to expanding operations into China and India but the Irish market is the priority at the moment.

At the current 29.5p mid-price National Milk Records is capitalised at £2.17 million. At present the shares are trading on a hefty historic multiple of 18.4 and at just under 2 times net assets the shares look fairly valued for now.