Dairy Crest has revealed that it is “on track” to exceed its cost saving target for the year – an achievement it hopes to mirror in 2013.
In its Interim Management Statement for the nine months ending 31 December 2012, the British dairy processor revealed that it is anticipating savings of around £23m for the full year.
Over the last 12 months, Dairy Crest has executed a number of cost-cutting measures in an attempt to improve the efficiency of its business. The company hopes to maintain this money-saving focus in the next 12 months.
“We have already identified several meaningful projects for next year that should enable us to maintain our track record in this area,” said Dairy Crest’s Interim Management Statement.
Looking ahead, the company revealed that capital expenditure will remain “relatively high” in 2013. It plans to invest in its Kirkby spreads plant, and increase its interest in whey protein.
“Strengthened” financial position
Throughout 2012 and into 2013, Dairy Crest took measures to improve efficiency and reduce its outstanding debts.
Last month, the company announced its latest restructuring measure – the closure of its Fenstanton, Cambridgeshire processing plant.
Dairy Crest said at the time that the restructuring of its Dairies business is the “right decision for the long-term future of Dairy Crest.”
In August 2012, Dairy Crest sold off its St Hubert spreads business to Montagu Private Equity for €430m – a sale Dairy Crest claims “significantly strengthened” its financial position.
“The sale of St Hubert has significantly strengthened Dairy Crest’s financial position, and has provided a strong foundation for the future. Our aim in deploying the cash from the transaction is to make targeted acquisitions,” the statement said.
Dairy Crest has not identified “any such acquisition” to-date, the statement added.
Full year core brand growth
Meanwhile, Dairy Crest’s four core brands – Cathedral City, Country Life, Clover and FRijj – continued to experience growth in 2012. The products recorded sales volume growth of 4% and sales value growth of 5% in the nine months ended 31 December 2012.
Dairy Crest expects to maintain this mid-single digit growth into Q4.