Dairy Crest's Trading is In Line with Expectations

UK - Dairy Crest has coped well in a challenging business environment and overall trading remains in line with expectations, according to the Interim Management Statement for the nine months ending 31 December 2011.
calendar icon 3 February 2012
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Dairy Crest states that this demonstrates the benefits of its broadly based business. Group sales in the first nine months of the year have increased by two per cent over last year on a like for like basis. This excludes the effect of the disposal of our majority stake in Wexford Creamery Limited.

The company continues to focus on controlling its costs and growing added value sales. It remains on track to deliver its targeted annual cost savings of £20 million this year. Third quarter sales of the company's five key brands (Cathedral City, Country Life, St Hubert Omega 3, Clover and Frijj) are up eight per cent compared to last year, leading to value growth for the first nine months of the year of six per cent. The four new products that Dairy Crest launched last autumn have good customer listings and sales are building satisfactorily.

Dairy Crest's Foods business has traded strongly. In the UK its three key Foods brands (Cathedral City, Country Life, and Clover) performed well over the third quarter, boosted by a strong marketing programme involving both TV advertising and promotions. St Hubert, Dairy Crest's French spreads business, has had a very strong quarter and has again increased its market share.

Trading remains difficult in Dairy Crest's Dairies business where a combination of high milk purchase prices and lower cream realisations is adversely affecting profitability.

Dairy Crest's focus remains on reducing the cost base as the best way to restore long-term profitability and its three year investment programme is on track. Dairy Crest also aims to increase added value sales in this business and Frijj, milk bag and milk&more sales have continued to grow.

Remaining focussed on cash management, Dairy Crest expects its net debt at 31 March 2012 to be below that at 30 September 2011. This is in line with the usual seasonal trends. Dairy Crest is committed to further reductions in the longer term.

Mark Allen, Chief Executive of Dairy Crest, commented: "Dairy Crest has coped well in a challenging business environment and overall trading remains in line with our expectations this year. Although we remain cautious about the economic environment we continue to manage the business proactively to meet the challenges we face."

Dairy Crest expects to issue its full-year trading update on 29 March 2012 and its Preliminary Results for the year ended 31 March 2012 on 24 May 2012

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