Profits Warning From Dairy Crest

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Profits Warning From Dairy Crest

Profits Warning From Dairy Crest
September 25
09:57 2012
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UK dairy group Dairy Crest has cautioned that its first half profits, adjusted for the disposal of its French spreads business, St Hubert, will be lower than the same period last year. However, the group’s profit expectations for the full year ending 31 March 2013 remain unchanged.

Dairy Crest’s four key brands (CathedralCity, Country Life, Clover and Frijj) have continued to perform strongly in the first half, benefiting from increased marketing expenditure. All four have been advertised on television in the period – the first time that has ever happened. 

Dairy Crest has also confirmed its plans to close its site at Crudgington in Shropshire as part of its strategy to consolidate spreads production into a single UK location, its existing facility at Kirkby, Merseyside.

Dairy Crest is also taking decisive action to tackle its underperforming dairies division and is aiming to achieve a 3% return on sales in this business in the medium term. Measure to achieve this include implementing milk selling price increases, closing the Aintree creamery, consolidating milk rounds to allow the closure of 23 depots and reducing overheads. Plans are on track to close the Fenstanton dairy, as previously announced.

The sale of St Hubert for Eur430 million on 28 August 2012 has allowed Dairy Crest to improve its financial position with part of the proceeds being used to repay borrowings.

Mark Allen, chief executive, comments: ‘We are pleased with our first half performance despite the significant pressures on our business. Although we expect these to continue into the second half our first half performance together with our plans for the second half means that our profit expectations for the full year remain unchanged.”

Dairy Crest will announce its interim results on 8 November 2012.

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