Dairy Crest set to hit targets
meet its profit targets for 2002 after strong performances from its
leading brands such as Clover, Cathedral City, Frijj and Yoplait.
Dairy Crest, the UK chilled dairy foods company, is on track to meet its profit targets for 2002 after strong performances from its leading brands such as Clover, Cathedral City, Frijj and Yoplait.
In a trading statement issued before a visit from analysts to the company's new 'super dairy' at Severnside, Gloucestershire, Dairy Crest said its brands had continued to grow throughout the year, with all of them showing good volume growth and increasing market share.
"The integration of the St Ivel Spreads business, acquired in November 2002, is going well and since completion the combined spreads business has performed ahead of expectations," the statement said.
But in common with most other dairy producers, Dairy Crest has continued to suffer from weak prices in the international cheese sector. "Margins in the cheese business were under short-term pressure due to high industry wide cheese stocks. These have remained at a high level for longer than expected but stocks are now approaching more normal levels," the company said.
It added that a £41 million investment in a creamery at Davidstow, Cornwall, was on track to be completed in spring 2004, and that this would support the continuing growth of the Cathedral City and Davidstow cheese brands.
"Trading conditions in the retail liquid milk market have been challenging," the company said. "However the business's performance has improved in the second half in line with expectations. Our household business has performed well. As expected the ingredients business has performed ahead of last year despite the results being adversely impacted in recent months by the appreciation of the euro against sterling and reductions in milk supply to this business."
Commenting on the new Severnside facility, the company added that it was capable of processing 500 million litres of milk per annum and that with its completion, dairy Crest's investment and restructuring programme was finally complete.
Severnside, together with the group's other 'super dairy' at Chadwell Heath, which opened in 2001, gives Dairy Crest " a significant competitive advantage in the challenging retail liquid milk market". Severnside produces a range of regional NRC and organic fresh milks, Frijj, added value milk shakes and potted cream.
