Dairy Crest profit rises in first full year without dairies

Dairy Crest posted its preliminary results for the year to 31 March on Thursday, with adjusted profit before tax up 5% to £60.6m.

The FTSE 250 company said that was off revenue of £416.6m, down 1%, while profit before tax plunged 11% to £40.3m.

Adjusted basic earnings per share were 3% higher at 35.6p, while basic earnings per share were down 15% at 23.7p.

Profit attributable to equity shareholders was £38.3m, swinging from a loss of £113m in the 2016 financial year, while operating cash flow was a positive £32.8m, compared to negative flows of £17.9m in the prior year.

Net debt stood at £249.9m, which was 9% wider than at the same time last year.

The company’s final dividend was declared at 16.3p, an improvement of 2% year-on-year.

“In the first full year since the transformational sale of our dairies business, we have delivered a robust performance in a tough market,” said chief executive Mark Allen.

“Our industry leading margins are the result of our focus on driving long-term value through brand building, innovation, investment in a world class supply chain and strong cost control.

“Our key brands are performing well.”

Allen said Cathedral City remained the nation's “favourite” cheese, and following its brand refresh at the start of the year, the good progress and momentum seen in the last six months continued into the new financial year.

“Our overall spreads market share has increased, and Frylight had another outstanding year with sales growing 19%.

“This is well ahead of the market.

“The ongoing investment that we are putting behind our brands gives me confidence that we can grow market share.”

Dairy Crest continued to make good progress in its demineralised whey operations at Davidstow, Allen added.

“We are now hitting our targeted level of infant formula grade.

“Developing our sales of demineralised whey and GOS into the high-margin global infant formula market will be a key priority this year.”

At the same time, the company would continue its research into other potential animal and human applications for GOS.

“Looking forward, I am excited about the future for Dairy Crest.

“The business is well positioned to deliver profitable, sustainable growth and stronger cash generation.

“This underpins our commitment to growing our dividends and reducing debt.”