26 May 1999
Dairy Crest details dividend after profit rise
By Robert Harris
FARMERS with shares in Dairy Crest are to receive an dividend averaging about £300 each after the company announced a 14% rise in pre-tax profits.
Strong performance in premium products, notably mature cheddar, helped Dairy Crest achieve a 12% growth in earnings per share in the twelve months to 31 March.
It is the third year in succession the company has posted a double digit rise.
Shareholders, of which about 20,000, or 45%, are farmers, will receive a final dividend of 8.15p a share, bringing the full year dividend to 12p.
That is worth, on average, about £300 to each shareholder.
Pre-tax profits rose 14% to £46.1m despite an overall fall in turnover of about 2% to £774 million, mainly due to lower raw milk costs.
John Houliston, Dairy Crest chief executive, said the results reflected the groups commitment to developing added-value products for its own brands and retailers.
This, in turn, could help producers too, he added, defending the groups profits in a year when dairy incomes slumped by 39%.
“Dairy Crest wishes to buy milk on the most competitive basis possible,” says Mr Houliston.
“But I believe farmers will have greater security, both in terms of markets and returns, in the medium term if we succeed in driving our value added range forward.
“This will dilute the amount of milk going into internationally traded commodities and retailer sales.”