Dairy Crest, the UK’s largest dairy processor, said today (31 March) that it will cut costs by GBP20m (US$32.2m) in its next financial year to offset rising input prices.
The owner of Cathedral City cheese and Clover butter said costs had risen “steadily” in its current fiscal year – which ends today – and added that it was “forecasting that this trend will continue”.
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Dairy Crest said: “To partially offset this, we have committed to another GBP20m cost-reduction programme for the next financial year. We are also making satisfactory progress to recover the balance of currently envisaged higher costs from our customers.”
The company’s comments came in a trading update for its fourth quarter. The Country Life butter maker said trading in the quarter had been “strong” and pre-tax profits for the year were “in line with expectations”.
Dairy Crest said a “strong” performance from its cheese division would “compensate for more challenging trading conditions in our spreads and dairies businesses”.
The group saw sales of its five key brands – which also include St Hubert Omega 3 cheese and Frijj milkshakes – rise during the year.
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By GlobalDataChief executive Mark Allen said: “This has been a year of strong progress for Dairy Crest in which we have consistently delivered on our strategy despite challenging trading conditions. We are well positioned with strong brands, tight cost control and an efficient supply chain.”
Dairy Crest will publish its annual results on 19 May.
