Strong growth in sales of key brands and liquid milk to retailers helped Dairy Crest increase pre-tax profits by 5% in the last year.
Preliminary results announced today (18 May) showed that the group’s revenue for the year-ended 31 March 2010 was down slightly on 2009 at £1630million, but efficiency improvements and lower costs saw adjusted group profit before tax increase 5% to £83.5m.
Group net debt was better than expected at £337.2m and £78.6m lower than a year earlier.
“Our Dairies division has performed strongly and has benefited from lower costs and higher cream returns during the year,” a statement by chief executive Mark Allen said. “This has been partly offset by lower profits in our spreads and cheese divisions where, in line with our strategy to continue to grow our key brands, we have spent more on advertising and promotions during the year.
Dairy Crest said the Clover brand had a very successful year, growing by 5% in value and 13% in volume, following a new advertising campaign. Its flagship cheese brand, Cathedral City, also performed well with sales up 12% and volume up 18%. The brand is worth £214m at retail prices, and has a 16% share of total cheddar market.
“Dairy Crest has changed from the predominantly commodity focused, UK business that it was fifteen years ago to an added value dairy food company with a significant profit stream from continental Europe. We have shown that we can grow added value sales both organically and through acquisitions and we are well placed to continue this,” Mr Allen said.
Watch out for more profit announcements and other farming business news in Phil Clarke’s Business Blog.