Interim Management Statement for the nine months ended 31 December 2011.
Dairy Crest has coped well in a challenging business environment and overall trading remains in line with our expectations. This demonstrates the benefits of our broadly based business. Group sales in the first nine months of the year have increased by 2% over last year on a like for like basis. This excludes the effect of the disposal of our majority stake in Wexford Creamery Limited.
We continue to focus on controlling our costs and growing added value sales. We remain on track to deliver our targeted annual cost savings of £20 million this year. Third quarter sales of our five key brands (Cathedral City, Country Life, St Hubert Omega 3, Clover and Frijj) are up 8% compared to last year, leading to value growth for the first nine months of the year of 6%.
The four new products that we launched last autumn have good customer listings and sales are building satisfactorily.
Foods trading strongly
Our Foods business has traded strongly. In the UK our three key Foods brands (Cathedral City, Country Life, and Clover) performed well over the third quarter, boosted by a strong marketing programme involving both TV advertising and promotions. St Hubert, our French spreads business, has had a very strong quarter and has again increased its market share.
Dairies driving efficiencies but trading difficult
Trading remains difficult in our Dairies business where a combination of high milk purchase prices and lower cream realisations is adversely affecting profitability. Our focus remains on reducing the cost base as the best way to restore long-term profitability and our three year investment programme is on track. We also aim to increase added value sales in this business and Frijj, milk bag and milk&more sales have continued to grow.
We remain focussed on cash management and we expect our net debt at 31 March 2012 to be below that at 30 September 2011. This is in line with the usual seasonal trends. We are committed to further reductions in the longer term.
Mark Allen, Chief Executive of Dairy Crest, commented:
"Dairy Crest has coped well in a challenging business environment and overall trading remains in line with our expectations this year. Although we remain cautious about the economic environment we continue to manage the business proactively to meet the challenges we face."
Dairy Crest expects to issue its full-year trading update on 29 March 2012 and its Preliminary Results for the year ended 31 March 2012 on 24 May 2012
For further information, please contact:
Dairy Crest Group plc
Arthur Reeves 01372 472236
Nina Coad 020 7404 5959