UK: Dairy Crest reports solid year
UK dairy group Dairy Crest has said that the past financial year had been one of "significant progress", addin that full year trading was in line with expectations.
In a trading statement issued ahead of its year-end results, the company said the year had seen three major transactions, namely the acquisition of Express Dairies, the disposal of the majority of its retailer brand cheese operations to First Milk and a significant overseas move with the acquisition of St Hubert, the French and Italian spreads business, from Uniq. "These transactions are all in line with Dairy Crest's strategy to improve the quality of its earnings and reduce the group's exposure to commodity markets," the company said.
Dairy Crest said it had also recorded "good growth" from some of its key brands in 2006, including Cathedral City, Country Life Spreadable, Frijj and St Hubert Omega 3. For the year as a whole, trading has been in line with its expectations, Dairy Crest added.
Cathedral City saw double-digit growth, but the company said the Stilton market had remained challenging. In its spreads business, Dairy Crest said that Clover and Country Life Spreadable had performed well with the latter, in particular, showing strong growth. However, Utterly Butterly and St Ivel Gold had faced challenging market conditions and declined during the year.
St Hubert was making good progress, Dairy Crest said, and results were in line with expectations since the acquisition which was completed in January. In particular, St Hubert Omega 3 continued to grow strongly. Dairy Crest's joint venture Yoplait Dairy Crest (YDC), had performed in line with expectations with good growth from the Weight Watchers, YOP and Wildlife brands offsetting a weaker performance from Petits Filous, the company said.
In its dairies business, the group said it continued to focus on improving performance in its major retail milk business. During 2006, the company was retained as a key supplier of fresh milk to Sainsbury's and recorded a strong performance from its flavoured milk brand Frijj. In addition, the company launched Country Life organic milk to take advantage of the growing organic milk market.
"This has been an active year during which we have significantly reshaped the business," said Dairy Crest's chief executive Mark Allen. "Dairy Crest traded solidly throughout the year and we are encouraged by the initial contribution from St Hubert spreads and the continued strong performance of Cathedral City. We expect to report full-year results in line with our expectations."
The company is due to publish its preliminary results for the year to the end of March on 22 May 2007.
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