Dairy Crest is to cut “up to 80 jobs” from its head office as the UK group battles to keep a lid on rising costs amid the economic downturn.
A spokesman for Dairy Crest told just-food today (10 November) that the jobs would go at the company’s headquarters, which are based in Surrey.
The job losses come as the company also considers closing a dairy in Nottingham, a move that would see some 200 workers lose their jobs.
“We have to keep reviewing our costs to help consumers through these difficult times,” the spokesman said.
He confirmed that Dairy Crest had seen its sales on promotion rise by around 5% as it looked to respond to trading down among consumers.
However, shares in Dairy Crest tumbled today after the company warned annual profits would fall by around 10% as consumers become more “value driven”.
Dairy Crest shares on the London Stock Exchange stood at 247p at 14:29 GMT, a fall of 25.2%, in the wake of the company’s profit warning.
The company said a combination of the economic downturn, weaker returns from dairy ingredients and plans to delay property disposals would hit earnings.
The spokesman said Dairy Crest had been forced to postpone plans to sell town centre doorstep delivery depots due to the “fragile housing market”.
The profit warning came as Dairy Crest reported rising half-year sales and earnings on the back of “double-digit” sales growth from key brands including Cathedral City and Clover.
Revenue was up 6% at GBP808.2m (US$1.26bn) for the six months to 30 September, while underlying pre-tax profits rose 4% to GBP38.5m.
Chief executive Mark Allen said Dairy Crest had “delivered a robust performance” during the first half of its fiscal year but sounded a note of caution on the months ahead.
“The economic environment is becoming increasingly tough and more difficult to predict,” Allen said. “However we are actively addressing these difficulties by continuing to invest in our business, particularly in the form of marketing spend and in the development of our operating facilities. We will also maintain the ongoing focus on operating efficiencies and cost control. We believe that these initiatives will leave us well positioned for the future.”