Dairy Crest Group PLC Trading Statement (1348K)
September 19 2016 - 2:00AM
UK Regulatory
TIDMDCG
RNS Number : 1348K
Dairy Crest Group PLC
19 September 2016
19 September 2016
Dairy Crest Group plc ("Dairy Crest")
TRADING UPDATE FOR THE SIX MONTHS ENDING 30 SEPTEMBER 2016
Dairy Crest is issuing the following pre-close trading update
for the six months ending 30 September 2016, ahead of announcing
its Interim Results on 10 November 2016.
Trading Update
In the first half we expect that combined volumes of our four
key brands, Cathedral City, Country Life, Clover and Frylight, will
be ahead of last year. This is an improvement on the first quarter
where they were in line with last year.
Three of these brands, Clover, Country Life and Frylight are all
showing strong volume growth and continue to increase market share,
building on momentum from the second half of last year.
During the first half, Cathedral City successfully launched its
new branding and packaging. In order to maintain the brand's
premium positioning within the category we have chosen to discount
less than our competitors during the period. As a consequence we
expect a small volume decline in the first half of the year
compared to a very strong performance in the first half of last
year. Margins have improved and we have seen a positive consumer
reaction to the new packaging and marketing campaign. We expect
volumes to improve in the second half of the year.
We continue to benefit from production efficiency improvements
at our demineralised whey and galacto-oligosaccharide facilities in
Davidstow. In partnership with Fonterra we are developing the
customer base for both products.
Profit and financial position
We expect half year profit to be ahead of last year and our
expectations for the full year remain unchanged.
As usual, we anticipate that Dairy Crest's net debt will peak
around the middle of year as the first half is characterised by
increased stock levels due to the seasonality of milk supply.
Reduced capital expenditure and strong underlying cash flow means
that the increase in net debt in the first half of this year is
anticipated to be lower than that seen in 2015.
Mark Allen, Chief Executive, commented:
"Dairy Crest expects to report a good performance in the first
half of this year. We continue to see good momentum from our key
brands. Our butters, spreads and oils business delivered strong
volume growth and increased market share in the first half. There
has been a very positive customer response to the Cathedral City
refresh which should underpin future growth of the brand.
"Recently we have seen inflation across all dairy markets. To
date we have announced increases amounting to 12 per cent in the
milk price we pay our farmers. Cream prices have been particularly
affected, doubling over a very short period. This sudden cost
inflation is likely to have an impact on butter volumes and margins
in the second half.
"As a strong branded and added value business, Dairy Crest is
well placed to deal with inflationary pressures. As such our
outlook for the full year remains unchanged."
ENDS
Dairy Crest is hosting a visit for analysts and investors at its
Davidstow Creamery on Monday 19(th) and Tuesday 20(th) September.
The management team will make presentations on this trading update,
key brands, our demineralised whey and galacto-oligosaccharide
projects and our supply chain. These will be made available on
Dairy Crest's website at www.dairycrest.co.uk/investors. No
material new information will be disclosed in these
presentations.
Dairy Crest expects to issue its Interim Results for the six
months ending 30 September 2016 on 10 November 2016.
For further information:
Dairy Crest
Alistair Smith Investor Relations 07740 534910
Olivia Seccombe External Affairs 07872 808875
Brunswick
Mike Smith / 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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