Dairy Crest profits fall despite brand growth

Dairy Crest‘s profits fell 8% in the last financial year as the company tried to readjust to volatile dairy commodity markets.

The firm’s preliminary results for the year-ended 31 March 2009 showed that overall Group revenue was up 5% on 2007/08 to £1648m and overall profit before tax increased 56% to £103.2m on the back of volume growth in key brands. But high purchase prices for milk and weak dairy commodity markets meant adjusted pre-tax profits fell to £79.5m. Adjusted earnings per share also fell, from 51.7p to 45p over the same period.

“This year has been an important one for Dairy Crest in our journey from commodity processor to added value food manufacturer,” chairman Simon Oliver, said in a statement. “We have shown ourselves capable of developing our business in a difficult economic environment by growing brands and improving operational efficiency.”

He said the company had grown all its key brands, which include Cathedral City cheese and Clover and Countrylife spreads, and had also continued to reduce costs and become more efficient.

“I continue to value the relationship we have with our dairy farmers who have supplied us with milk during the year. They play a key role in our business. It is important that we continue to take their views into account as we move forward and I believe we have the right structure in place to do this.”