Dairy Crest Group PLC AGM and Interim Management Statement (9216S)
July 14 2015 - 2:00AM
UK Regulatory
TIDMDCG
RNS Number : 9216S
Dairy Crest Group PLC
14 July 2015
14 July 2015
Dairy Crest Group plc ("Dairy Crest")
AGM and Interim Management Statement
Dairy Crest is issuing the following Interim Management
Statement for the 3 months ended 30 June 2015 at its Annual General
Meeting later today.
Trading performance
Overall our Cheese and Spreads businesses have performed in line
with our expectations during the first quarter and the outlook for
the full year remains unchanged.
In the first quarter aggregate sales of our four key brands,
Cathedral City, Clover, Country Life and Frylight, were in line
with the first quarter of last year. Cathedral City had another
strong quarter, during which it has continued to grow sales and
market share. The brand is now Britain's 16(th) largest grocery
brand (Source: The Grocer) and its 7(th) largest grocery online
brand (Source: CheckoutSmart). Frylight has also continued to
perform very strongly. However Clover and Country Life sales have
fallen in a butter and spreads market that continues to
decline.
We expect sales of our key brands to perform strongly as the
year progresses. However as previously announced, the combined
performance of our Cheese and Spreads businesses will be weighted
towards the second half.
Davidstow investment
The project to make demineralised whey powder and
galacto-oligosaccharide (GOS) at our Davidstow creamery is nearing
completion and we expect to start selling both these products in
this financial year. The first full-year benefit from these new
products, which give Dairy Crest access to new sales channels in
growing global markets, will come in the year ending 31 March
2017.
Sale of Dairies operations
On 6 November 2014 Dairy Crest announced that it had agreed to
sell the assets of its Dairies operations to Muller UK &
Ireland Group LLP. The sale has already received the approval of
Dairy Crest's shareholders but remains subject to that of the
Competition and Markets Authority, which, as announced on 26 June
2015, is now looking at undertakings offered by Müller. A further
update is expected on 21 August 2015.
Financial position
Underlying cash generation is good and, as the year progresses,
lower milk costs will make a significant difference to the carrying
value of cheese stock and hence working capital.
As usual we anticipate that Dairy Crest's net debt will peak
around the middle of the year. We expect the usual stock build in
the first half of the year reflecting the seasonality of milk
production, which has been high this year. Additionally it will
reflect another six months where capital expenditure has exceeded
depreciation as we complete the investments at Davidstow and Harper
Adams University, the site of our new innovation centre.
Our expectations for the full year remain unchanged.
Mark Allen, Chief Executive, commented:
"The year has started off as we expected. Higher sales of
Cathedral City and Frylight are encouraging in markets that remain
challenging.
"Our demineralised whey and GOS projects are nearing completion
and we will see the full benefits next year. We are also making
progress with the sale of our Dairies operations and we expect this
to complete before the end of 2015.
"Dairy Crest is well positioned for profitable and sustainable
growth. Our full year expectations remain unchanged."
Dairy Crest's Annual General Meeting will be held today at
midday at the offices of Eversheds LLP, 1 Wood Street, London EC2V
7WS.
Dairy Crest expects to issue its half-yearly trading update on
22 September 2015 and its Interim Results for the six months ending
30 September 2015 on 5 November 2015.
For further information:
Dairy Crest
Arthur Reeves 01372 472236
Brunswick
Max McGahan 020 7404 5959
This information is provided by RNS
The company news service from the London Stock Exchange
END
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