Dairy Crest Reports Strong Performance

UK - Dairy Crest has reported strong performance in the last three months, which has resulted in a profit before tax ahead of expectations. The company has published an interim management statement for the nine months ending 31 December 2009.

2 February 2010

2 minute read

Europe

The company says that this has been achieved through their strategy of delivering growth by investing in own brands, controlling costs and generating cash.

Sales for the nine months were down one per cent compared to the same period last year due to lower sales of commodity ingredients and milk to non-major retail customers.

The company has focused on trying to increase sales through high levels of advertising and promotions. Sales of milk to supermarkets has also continued to increase, whilst the company has maintained the momentum behind their doorstep delivery internet proposition milk&more.

Dairy Crest has said that cost control remains an important part of their strategy - they have managed to save costs by redesigning some of their spread tubs, reducing packaging costs.

Through continued cash management, the company expected their year-end debt to be below £350 million. They expect further improvements to reduce net debt.

They have continued to invest in own facilites, which they believe allows them to provide high quality products at a competitive cost. Over the last 18 months, investment has been focused on the cheese business and the opening of the new Nuneaton packing plant.

Mark Allen, Chief Executive added: "We are encouraged by the strong progress we have made so far this year and anticipate that we will maintain our momentum into the fourth quarter. Over the last two years our five key brands (Cathedral City, Country Life, St Hubert Omega 3, Clover and Frijj) have grown by 39 per cent. We will continue to focus on the strategy that has helped us deliver this success. Cash generation remains key and we have identified opportunities to continue the drive that has delivered a significant reduction in our net debt.

"Looking forward, the increased investment in our liquid milk dairies will allow us to drive further cost efficiencies, remain competitive and maintain high levels of service to our customers.

"We remain cautious about the trading environment for 2010 but the improvements we have made to our business during 2009 leave us well positioned to cope with the challenges."