The cheese and spreads company reported revenues of £220.1M, up 16% on the same period last year, and adjusted profit before tax of £20.6M – which represented profits from continuing operations before exceptional items, amortisation of acquired intangibles and pension interest – up 8% compared with £19.1M last year.
However, the company’s net debt increased 7% from £262.3M in 2016 to £281.4M this year, as anticipated in its pre-close statement released in September.
Dairy Crest also announced that its full-year expectations remained unchanged.
“We have had an encouraging first half, with Cathedral City, Clover and Frylight delivering good growth in both volumes and value. Cathedral City, the nation's favourite cheese, continues to go from strength to strength and has produced exceptional growth over the period,” said Dairy Crest chief executive Mark Allen.
“We have delivered good profit growth despite a record high cream price, which has a temporary but significant impact on input costs in our butter and spreads business.
“We expect to accelerate sales of demineralised whey and GOS [the prebiotic galacto-oligosaccharide] in the second half of this year. In conjunction with our partner Fonterra we are making good progress in developing sales channels for our products.
“Our strong brands and the quality and efficiency of our operating facilities mean that we are well positioned to grow. While we expect butter input costs to continue to be challenging for the remainder of the year, we are confident in delivering our full year expectations.”
Last September, Dairy Crest pre-empted today’s announcement by reporting in its pre-close statement for the six months to September 30 that its four key brands – Cathedral City, Country Live, Clover and Frylight – would continue to drive volume growth for the company in the first half of this year.
It added that combined value growth of these brands was expected to be higher than volume growth, with Cathedral City expected to deliver double-digit volume growth in the first half. However, higher cream prices had raised input costs for Dairy Crest’s butter business, which resulted in reduced promotional activity on Country Life and impacted sales volumes.
Dairy Crest interim highlights
- Revenue up 16% to £220.1M
- Adjusted profit before tax up 8% to £20.6M
- Cathedral City volume growth of 10%
- Clover and Frylight growing market share strongly
- Pension deficit eliminated on an accounting basis
- Kirkby restructuring underway to improve flexibility and reduce cost base
- Proposed interim dividend up 2% to 6.3p