Dairy Crest expects to deliver on profits

Higher sales of key brands and increased profits from cheese have underpinned a strong first half of the year for Dairy Crest.

In a trading update for the six months ending 30 September 2010, the firm said trading had been ahead of last year, despite the liquid market remaining very competitive.

“Sales of our key brands and of milk to major retailers have increased in the period and we have made operational efficiencies and achieved selling price increases to limit the impact of higher input costs,” a statement said.

Yesterday (29 September) the firm announced a new long-term deal with Morrisons and a separate contract with Sainsbury’s is due to start early next month.

However, it said the middle ground liquid milk sector remained very competitive and sales volumes in this market were lower than last year.

Mark Allen, chief executive, said: “This has been another good performance from the business. We are operating in extremely competitive markets. Input costs have increased and consumer confidence remains fragile.

“In the first half our broad base, high quality brands, strong programme of efficiency improvements and focus on cash generation have allowed us to balance these conflicting demands successfully. We are confident that we can deliver profits this year in line with our expectations.”

Dairy Crest will announce its interim results on 11 November 2010.