The UK’s Dairy Crest has reported lower first-half profit in line with expectations and said it plans to launch an omega-3 enriched variant of St Ivel Gold in 2006.

The company posted profit before tax of £17.0m (US$29.7m) for the six months to 30 September, compared to £32.0m in the previous year’s first half. Revenue rose to £641.9m from £630.5m a year earlier.

“Dairy Crest has delivered first half results in line with market expectations. We have had a good first half in the foods division. The dairies division has been strengthened by acquisitions and we expect the full benefits to come through towards the end of the current financial year. We continue to make progress in developing our portfolio of brands in both the foods and dairies divisions with particular recent focus on new product activity in dairy functional foods,” said chief executive Drummond Hall.

“Overall, although trading conditions are competitive with oil-related costs continuing to be high, the group’s expectations for the full year remain unchanged,” he added.

Dairy Crest highlighted the strong performance from its Cathedral City, Clover and Petits Filous brands, and said its cheese business was benefiting from strong Cathedral City growth and firmer market prices.

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It has also made a major investment in a new marketing campaign for the Country Life butter brand, which it believes represents a significant long-term opportunity for the group.

Dairy Crest said its St. Ivel Gold spread brand has been under pressure from some strong competitor activity with sales down 14% by value and 2% by volume. The company is focusing its activity in the growing specific health sector and in January it plans to launch a new functional variant of St. Ivel Gold with Omega-3 together with a new marketing campaign.

In May 2005 the company launched “St. Ivel advance”, a branded milk enriched with Omega-3, which has now achieved distribution across all of the major retailers.

“Whilst it is still too early to evaluate, initial customer reaction to the brand has been good. We are pleased that Professor Winston has agreed to be a spokesperson for the brand and a television advertising campaign has just been launched promoting the brand as ‘Clever milk’,” Dairy Crest said.