Anthony Fry, Chairman of Dairy Crest, will make the following Interim Management Statement at the Company's Annual General Meeting later today.
First quarter trading in line with expectations
Dairy Crest's overall trading in the first quarter has been in line with our expectations. In an increasingly tough trading environment we continue to grow added value sales and drive efficiencies.
Total sales of our five key brands (Cathedral City, Country Life, Clover, St Hubert Omega 3 and Frijj) have increased by 5 % compared to the same period last year.
We also have a strong innovation pipeline, with several interesting new products due to be launched later this year. In the UK these include Chedds, our new children's cheese snacks and new premium flavours for our branded milk shake - Frijj ('The Incredible'). In France we will launch a new St Hubert non-dairy cream and a spread that contains edible seeds.
On 30 June 2011 we purchased the branded food business, M H Foods, for £13 million. This business manufactures healthy 'one calorie' spray cooking oils and salad dressings. It has a good history of innovation over many years, the leading brand in its sector and fits well with our Spreads business and we believe the acquisition will allow us to build on our strong portfolio of lighter brands.
Our Dairies business has benefited from higher than anticipated cream prices. However strong competition in retail milk markets has resulted in lower residential milk sales.
As previously announced, we are facing some significant increases in input costs. We are on track to recover these through a combination of efficiency savings and selling price increases. We remain committed to making efficiency savings of £20 million this year.
After taking into account the acquisition of M H Foods, our financial position remains in line with our expectations.
Mark Allen, Chief Executive, commented:
"We knew at the start of the year that we faced higher input costs in an increasingly tough environment for consumers. By focusing on our brands and by becoming more efficient we are dealing with those challenges and are
soundly placed for the rest of the year. We remain committed to innovating and investing in our brands and our facilities for long-term benefit."
Dairy Crest's Annual General Meeting will be held today at midday at the offices of Eversheds LLP, 1 Wood Street, London EC2V 7WS.
For further information, please contact:
Dairy Crest Group plc