Dairy Crest Group PLC Interim Management Statement (0890E)
February 05 2015 - 2:00AM
UK Regulatory
TIDMDCG
RNS Number : 0890E
Dairy Crest Group PLC
05 February 2015
5 February 2015
Dairy Crest Group plc ("Dairy Crest")
Interim Management Statement
Dairy Crest is today issuing its Interim Management Statement
for the nine months ended 31 December 2014. Our Cheese and Spreads
businesses have performed robustly in a widely- reported difficult
environment. Against this background our Dairies business has
continued to make losses.
We are pleased with the performance of our four key brands.
Taken together, sales of Cathedral City, Country Life, Clover and
FRijj have been flat over the nine month period compared to last
year. Cathedral City, significantly the UK's leading cheddar brand,
has continued to grow its market share and FRijj has performed
strongly. However their growth has been offset by lower Clover and
Country Life sales.
Sale of Dairies operations
On 6 November 2014 Dairy Crest announced that it had agreed to
sell the assets of its Dairies operations to Müller UK &
Ireland Group ("Müller"). The transaction is on track and has
received the approval of Dairy Crest shareholders. It remains
conditional on the approval of the relevant competition
authorities. Dairy Crest and Müller have asked for the transaction
to be referred back to the UK for review by the Competition and
Markets Authority ("CMA") and are engaged in constructive talks
with the European Commission and the CMA on this application with a
view to progressing the merger review as quickly as possible.
Dairies performance
We continue to expect the second half performance of our Dairies
business to be better than the first half. Milk costs have fallen
but production is higher and selling prices are lower. This has
adversely affected profits in this product group. We expect some of
the shortfall to be offset by higher property profits, which we now
expect to exceed those of the first half.
Cheese and Spreads
The third quarter performance of our Cheese and Spreads
businesses, which will be the heart of Dairy Crest after the sale
of our Dairies operations, has been more robust than that of
Dairies. Lower cream prices have benefitted Spreads profits.
However reduced whey realisations in particular and some reduced
selling prices on the back of lower input costs have adversely
affected Cheese profits. Taken together, trading in these
businesses was in line with our expectations despite the
challenging environment.
We have made good progress with the major projects that will
grow future profits in these businesses. During the third quarter
we transferred production to Kirkby and closed our Spreads
manufacturing plant at Crudgington. Our innovation team, previously
based at Crudgington, has moved to Harper Adams University where we
are building a new innovation centre. Our demineralised whey and
galacto-oligosaccharide projects at Davidstow which target the
growing, global infant formula market, remain on budget and we
expect to start manufacturing both products towards the end of this
summer.
We continue to anticipate that year end net debt will be
significantly lower than at 30 September 2014.
Board change
On 31 March 2015, Martyn Wilks, Executive Managing Director,
will leave Dairy Crest to pursue other interests. Martyn has been
on the Board for over seven years and has played a key role in
building our brands, by increasing our focus on the consumer and
developing our innovation capability. At this time he will not be
replaced on the Board. Most of his key responsibilities will
transfer to Adam Braithwaite. Adam has held the role of Group
Commercial Director for the past two years and was appointed to the
Management Board earlier this year. He has worked for Dairy Crest
for over 13 years in a number of senior customer-facing roles.
Mark Allen, Chief Executive of Dairy Crest, commented:
"Against the background that we operate in, Dairy Crest has
delivered a solid performance. Maintaining the sales of our four
key brands in line with last year and growing our overall Cheese
and Spreads profits is a good result in today's challenging
environment. We continue to strengthen these businesses and are
investing for future growth."
"The performance of our Dairies business reflects the
difficulties facing the whole UK dairy sector. The proposed sale of
our Dairies operations, which is progressing to plan, will lead to
economies of scale. These are necessary to underpin the value
currently being offered to consumers and to help the UK dairy
sector compete in global markets".
"I would like to take this opportunity to thank Martyn Wilks for
his important contribution to the business over the last seven
years. He has made a significant difference to the performance of
our brands in that time and leaves with our best wishes for the
future."
Dairy Crest will issue its Preliminary Results for the year
ending 31 March 2015 on 21 May 2015.
For further information, please
contact:
Dairy Crest Group plc
Arthur Reeves 01372 472236
Brunswick
Tim Danaher 020 7404 5959
This information is provided by RNS
The company news service from the London Stock Exchange
END
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