Dairy Crest, the UK’s largest dairy processor has today (10 November) posted a rise in half-year profit and remains upbeat for its full-year outlook.
Adjusted profit before tax for the first six months of the year stood at GBP43.7m (US$75.3m), up 9% on the same period last year.
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The company which makes Cathedral City, Country Life and Clover products, benefited from increased property profits of GBP4.6m, higher profits in its spreads and cheese sectors, which helped offset lower dairies profits.
Paying a higher price to farmers and retail price competition put pressure on dairies’ margins, the company said.
Dairy Crest aims to increase profits from this division in the second half of the year by reducing costs and growing added-value sales.
Revenues were up 2% to reach GBP796.2m for the first six months of the year.
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By GlobalDataAnnual efficiency savings of GBP20m helped offset higher input costs, Dairy Crest said. Adjusted basic earnings per share were GBP0.24, up 16% on last year.
However, the company’s net debt was up 9% on the same period last year, reaching GBP365.3m. The company expects debt to reduce during the next six months in line with seasonal improvement in milk quality. It is also taking action to reduce costs and improve efficiency.
Dairy Crest chief executive Mark Allen remains confident about the company’s outlook, despite economic uncertainty. He said the consumer environment is “challenging and increasingly difficult to predict”.
“Despite this, we remain confident that we will deliver profits for the year in line with our expectation,” he added.
