Growth in cheese and spreads leads to Dairy Crest sales rise
Dairy Crest, which has its innovation centre at Harper Adams University, saw a strong performance in its Cathedral City cheese and Clover spreads brands lead to higher revenue in the first half of the year.
Revenue rose two per cent to £224.9 million in the six months to September 30 as a seven per cent growth in Cathedral City and a nine per cent increase in Clover offset a four per cent decline in Country Life butters and a 22 per cent drop in Frylight cooking oil.
The company, which closed its former Crudgington creamery site near Telford in 2015, said an unusually hot summer in the UK resulted in less consumption of cooking oil while high input costs continued to impact butter sales.
Adjusted profit before tax gained 13 per cent to £22.7 million as finance costs declined.
Net debt was cut by £60 million to £221 million at the end of the period, using some of the proceeds of a £68 million share placing in May.
The share placing was carried out to help fund the £85 million expansion of its cheese operations. The company is increasing capacity of its Davidstow creamery to 7,000 tonnes of cheese per year from 54,000 tonnes per year to grow Cathedral City in the UK and the US.
Mark Allen, chief executive of Dairy Crest, said: “We have delivered a good first half performance driven by our two largest brands, Cathedral City and Clover. Demand for our functional Ingredients continues to grow.
“Innovation continues to shape the business and we have recently launched exciting new products in all of our categories. We understand the importance of staying ahead of the market and ensuring we are meeting consumers’ needs. Food provenance, health and wellbeing are core themes which we will continue to focus on.
“Our investment at Davidstow is progressing as planned. We are pursuing a number of opportunities to take Cathedral City into new international markets as well as deepen its penetration into existing domestic channels, capitalising on its status as one of the UK’s top ten brands according to YouGov. We are confident in delivering our expectations for the full year.”
The group also recently launched new products in all of its categories, including a lactose free cheese range.
The company had a pension surplus of £126.9 million at the end of September, compared to £39.9 million last year.
Dairy Crest raised its interim dividend by two per cent to 6.4p each as cash generation jumped 71 per cent to £18.5 million.
Shares rose 1.8 per cent to 456p in morning trading.