Dairy Crest has reported rising half-year profits after managing to pass on higher dairy costs to its customers.
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The UK firm, which makes brands including Cathedral City cheese and Utterly Butterly, booked underlying profits of GBP37.1m (US$78.1m), a rise of 21%, for the six months to the end of September.
Revenue jumped 29% to GBP761.4m, thanks to the acquisitions of Express Dairies and St Hubert in the last year.
Chief executive Mark Allen admitted market conditions are “challenging”. Drought in Australia and growing demand in Asia have pushed up global milk prices; since June, Dairy Crest has increased the price it pays to farmers by 35%.
“We are implementing price increases across most dairy categories to reflect higher raw milk costs,” Allen said.
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By GlobalDataUtterly Butterly sales jumped 18%, boosting Dairy Crest’s share of the dairy spreads category in the UK. However, a product recall in May meant Clover sales slumped 17%. Catherdral City cheese saw sales jump 23%.
The company’s St Hubert business, which it acquired in January, saw sales in France rise 4% against a declining spreads category.
Dairy Crest was one of five dairy firms accused of collusion by the UK’s Office of Fair Trading in September. The company said it is “reviewing” the claims with its legal advisors but declined to comment further.
Shares in Dairy Crest rose 36p to 599p by 12:01 GMT today (8 November).
