UK - Dairy Crest has announced interim results, showing a strong performance for Cathedral City cheese and a focus on a profitable future following the sale of its loss-making Dairies business.
Cathedral City sales rose by seven per cent and sales of the low-calorie cooking spray Frylight also rose by 37 per cent.
The report said the sale of the Dairies business will complete on 26 December 2015, meaning that the company's net debt should begin to fall from that point.
Mark Allen, Chief Executive, said: “The sale of our Dairies operations leaves Dairy Crest well positioned for long term profitable and sustainable growth alongside strong cash generation. We expect this to start in the second half of 2015/16 despite the continuing challenging environment.
“In the first half of the year Cathedral City has continued to go from strength to strength and has again grown sales and market share.
“A strong performance from Frylight has helped us maintain margins in our Spreads and Butters business. We have clear plans in place to address the performance of Clover and Country Life.
“We highlighted early in the current financial year that profits would be weighted towards the second half. With the benefit of lower cheese costs and an expected improved performance from our Spreads and Butters business in the second half, our full year expectations remain unchanged.
“Following the sale of our Dairies business, Dairy Crest will be a predominantly branded, simpler, more focused business with a significantly reduced overhead base. Future sales of ingredients for infant formula, which will start in the second half, will provide added impetus.
"We expect the increased focus on growth and cash generation to allow us to maintain our strong track record of rewarding shareholders with higher dividends.”
TheCattleSite News Desk