Dairy Crest Group PLC Interim Management Statement (3784W)
February 09 2017 - 2:00AM
UK Regulatory
TIDMDCG
RNS Number : 3784W
Dairy Crest Group PLC
09 February 2017
9 February 2017
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 2016.
Outlook
The outlook for the full year remains in line with our
expectations.
Branded performance
Our key brands have continued to perform well. Clover, Frylight
and Country Life have all grown volumes in the first nine months of
the year and have taken significant share in their respective
markets. As predicted, Cathedral City performance improved in the
third quarter.
Overall, in the first nine months of the year the combined
volumes of Cathedral City, Country Life, Clover and Frylight are in
line with the same period last year.
Innovation and brand building continues to be at the heart of
what we do. Clover and Frylight have both seen new packaging
launches during the quarter and Frylight has been supported by a
new TV advertising campaign over the last six weeks. In January
2017, Clover won the spreads category "Product of the Year 2017"
award in the world's largest consumer survey award for product
innovation. This is a testimony to the work we undertook to remove
artificial ingredients from Clover. Furthermore, in October 2016
Frylight won the Institute of Grocery and Distribution Health and
Wellness award. We will continue to invest in innovation and
marketing across our key brands through 2017.
Functional Ingredients
Production of demineralised whey powder and
galacto-oligosaccharide ("GOS"), both ingredients for the growing
global infant formula market, continues to develop well at our
factory in Davidstow. There have been significant improvements in
the percentage level of demineralised whey hitting the important
infant formula grade. We remain confident that this will continue
to rise and that we will hit our target of over 80% by 31 March
2017.
On 21 December 2016, Dairy Crest announced that it had entered
into a research partnership with Danisco Animal Nutrition, part of
DuPont, to further explore the potential uses of GOS in poultry and
swine. If successful, this work would help to broaden the potential
market for GOS beyond infant formula.
Balance sheet
We have seen further milk cost inflation since the half year and
have now announced increases in the price paid to farmers of 8.28
pence per litre since June 2016. This represents an increase of
38%. Furthermore, market prices for cream have remained high after
more than doubling in the first half of the year. The cream price
determines the input costs for our butter business. These movements
inevitably result in a short-term working capital outflow and, as a
result, we now expect year end net debt to be somewhat higher than
31 March 2016.
New auditor appointment
The Board has approved the appointment of Deloitte as external
auditor for the year commencing 1 April 2017. This appointment will
be subject to shareholder approval at the 2017 Annual General
Meeting. The Group's current auditor, Ernst & Young, is
retiring by rotation and will carry out the audit for the year
ending 31 March 2017. The Board would like to thank Ernst &
Young for their contribution to the business over many years.
Mark Allen, Chief Executive of Dairy Crest, commented:
"The outlook for the full year remains in line with our
expectations.
The business has continued to make progress during the quarter.
Our brands have performed well supported by successful innovation
and brand investment. I'm particularly pleased to see the
improvement in Cathedral City's performance.
At the new Davidstow functional ingredients facility we are
seeing significant improvement in the percentage level of
demineralised whey meeting infant formula grade. This is important
in maximising future opportunities in this market.
The announcement of the partnership with Danisco Animal
Nutrition marks a further significant step in the development of
GOS beyond infant formula. This has exciting potential
opportunities for the future."
Dairy Crest will issue its Preliminary Results for the year
ending 31 March 2017 on 18 May 2017.
For further information,
please contact:
Dairy Crest Alistair Smith 01372 472236
Dairy Crest Tom Atherton 01372 472264
0207 404
Brunswick Mike Smith 5959
This information is provided by RNS
The company news service from the London Stock Exchange
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