Dairy Crest is today providing its regular pre-close trading update. We will announce preliminary results for the year ending 31 March 2012 on 24 May 2012.
Profits in line with expectations
Dairy Crest's trading in our fourth quarter has remained in line with our expectations.
We continue to benefit from being a broadly based business. This year, as previously announced, strong performances from our Foods businesses will compensate for more challenging trading in our Dairies division.
Progress against strategy
Our strategy is to grow sales of our brands and other added value products, control our costs and generate cash.
Value sales of our five key brands (Cathedral City, Country Life, St Hubert Omega 3, Clover and Frijj) have increased this year. We have continued to invest strongly behind all these brands and are committed to ongoing growth.
As previously reported, sales volumes of these brands fell in the first half while we recovered higher input costs from our customers.
However a strong performance in the second half means that we expect total full year sales volumes to have increased compared to last year. Cathedral City and St Hubert have both recorded record market shares during the final quarter.
We have also increased sales through our doorstep delivery internet channel, milk&more.
Our cost reduction programme is on track to deliver annual savings in line with the £20 million target we set ourselves at the start of the year. These savings have partially offset higher input costs including milk.
We will continue to focus on reducing costs into the new financial year and expect to achieve a further similar level of annual savings
Dairies profits remain under pressure
Despite the progress we have made in identifying and delivering efficiency savings, profits in our Dairies business remain under pressure. We are looking at a range of options to restore this business to a satisfactory level of profitability.
Strategic review of French Spreads business
We announced on 9 March that we had commenced a strategic review of our French spreads business. We will provide a further update on this when appropriate.
Mark Allen, Chief Executive of Dairy Crest, commented:
"This has been a year of progress for Dairy Crest in which we have continued to deliver against our strategy despite challenging trading conditions.
Our business has faced sizeable inflationary input costs and we have dealt with these by focusing on our strong key brands and by driving efficiencies.
We continue to proactively shape our business for the long term."
For further information, please contact:
Dairy Crest Group plc
Arthur Reeves 01372 472236
Simon Sporborg 020 7404 5959