February 3, 2012
Dairy Crest's sales up 2%
In the first three quarters of the year, cheese maker Dairy Crest's sales rose 2% despite a "challenging business environment".
But the Cathedral City producer warned profits at its dairies business are being hit by the higher costs of buying milk and lower bulk cream values, which fell 15.2% last month to GBP1,230 (US$1,945) a tonne.
The company is trying to cut yearly costs by GBP20 million (US$31.6 million).
Figures for the last nine months of 2011 prompted broker Panmure Gordon to forecast a slump in operating profits at the dairies business from GBP27 million (US$42.7 million) to around GBP6 million (US$9.5 million).
Analyst Damien McNeela said: "The company could potentially seek a lower milk price from farmers."
Dairy Crest denied it plans to cut its milk prices to farmers. However, the company said its food division had been boosted by strong marketing. French spreads business St Hubert, in particular, increased market share in the third quarter. Meanwhile, Country Life and Cathedral City sales rose 8%, on-year, in the three months to the end of December.
The 2% rise in sales excludes the effect of the disposal of the company's majority stake in Wexford Creamery.