Dairy Crest has revealed that a strong performance from the UK group’s key brands over the past 12 months helped to boost full-year profits, which were up 5% despite rising raw milk costs.
In its trading update released this morning (19 May), Dairy Crest said that pre-tax profit, excluding exceptional items, for the year ended 31 March rose to GBP87.6m (US$141.7m), up from GBP83.5m last year.
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Increased profitability was achieved in spite of a GBP40m increase in the cost of raw milk over the period, Dairy Crest emphasised. Dairy Crest said that it has countered inflationary pressures through cost savings and efficiency gains, as well as higher selling prices.
Revenue was almost flat at GBP1.6bn, however, the company emphasised that its top five key brands – including Cathedral City, Country Life and Clover – saw sales rise 7% in the period.
Dairy Crest said that its Clover and Country Life spreads brands grew by 9% in the year, ahead of the overall market with was up 8% in the UK. Cathedral City booked a sales gain of 6%, again ahead of the 2% growth seen in the UK cheese market.
The company said its dairy division saw an increase in sales to major retail customers. However, this was offset by increased competition for supply to smaller retailers and food service customers.
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By GlobalData“A strong performance from our branded spreads and cheese businesses has more than offset tougher trading in dairies,” CEO Mark Allen said.
Profits in the dairies business fell 22% to GBP27.1m, compared with a flat profit performance in spreads at GBP53.3m and a 65.7% jump in cheese profits, which rose to GBP28m.
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