FDBusiness.com

Although revenue increased, due to strong growth in its Foods business, and group operating profits levels were maintained, UK dairy group Dairy Crest has reported a pre-tax loss of £10.1 million for the year ended 31 March 2012. Dairy Crest’s revenue rose by 2% to £1.63 billion during the year, with its Foods business growing sales by 10% supported by continued progress from its five key brands, which increased sales by 11%, boosted by a strong performance by Cathedral City cheese. However, revenue at the Dairies business fell by 2%.

Despite the challenging trading conditions, Dairy Crest managed to maintain adjusted profit before tax at £87.4 million but exceptional non-cash impairment charges in Dairies of £81.7 million resulted in a reported loss.

Mark Allen, chief executive of Dairy Crest, comments: “Dairy Crest’s results for the year demonstrate the continued benefit of being a broadly based business. Double digit growth in our branded Spreads and Cheese businesses has offset unsatisfactory results in Dairies. We have maintained adjusted group profits despite facing inflationary cost pressures of around £80 million this year by making annualised cost savings of around £22 million and achieving selling price increases. This has been made possible by a programme of consistent investment in developing our key brands and building a modern, efficient supply chain.”

Since the year end, Dairy Crest has announced a series of measures to restore its Dairies business to a satisfactory level of profitability in the medium term. In March 2012, Dairy Crest commenced a strategic review of its French spreads business, St Hubert, which is progressing.

Mark Allen adds: “In the current financial year, we are seeing continued strong momentum in our Foods businesses and we expect Dairies to benefit from the decisive action we are taking and our continued discipline on costs.”