Dairy Crest Reports Strong Trading
UK - UK dairy company, Dairy Crest, has traded strongly over its third quarter, according to its latest investors' report.The company said that despite a difficult economic environment, profit before tax for the nine months ended 31 December 2010 is in line with expectations.
Overall Group sales in the first nine months of the year were broadly unchanged from last year after excluding the effect of the disposal of our majority stake in Wexford Creamery Limited.
The company said it has grown added value sales in three key areas.
Its five key brands (Cathedral City, Country Life, St Hubert Omega 3, Clover and Frijj) continued to perform well.
Third quarter sales of these brands are up 11 per cent compared to last year, leading to value growth for the first nine months of the year of seven per cent.
The company said it has continued to increase sales of milk to major supermarkets.
"As planned, we have commenced supply of fresh milk to Tesco. Sales volumes to other large retail customers have also remained buoyant. Increased volumes to these customers have been offset by reduced sales to the middle ground milk market which remains very competitive," the company statement says.
"Finally, we have maintained the momentum behind our doorstep delivery internet proposition milk&more. The system improvements that we implemented in the autumn have increased capacity and improved the website for shoppers. In January 2011 we started a television advertising campaign and this has accelerated customer recruitment. Weekly milk&more sales are currently close to £1 million (from just under £800k in September 2010)."
Dairy Crest added that along with much of the food manufacturing sector it is experiencing upward pressure on input costs including milk, vegetable oil and other oil-related costs.
The company statement said that it anticipates that profit before tax for the year ended 31 March 2011 will be in line with expectations. This is supported by the anticipated delivery of over £20 million of operational cost savings.
Mark Allen, Chief Executive of Dairy Crest, said: "We are encouraged by the progress we have made so far this year and anticipate that we will maintain our momentum through the fourth quarter.
"Our employees, dairy farmers and hauliers had to face challenging weather conditions during much of the quarter. We would like to take this opportunity to thank them for their outstanding efforts that helped ensure that there was no significant effect on the business.
"We remain cautious about the economic environment for next year but we are well positioned to meet the challenges. Our strong range of products and broad customer base will help with this. In addition we will continue to innovate, control our costs and support our brands."
TheCattleSite News Desk