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Dairy Crest Group Interim results highlights and CEO statement

Dairy Crest Group Interim results highlights and CEO statement

Wed 7 Nov 2018 07:32 by ukcitymedia.co.uk about : trading updates - 0 Comments - 6170 words


 

Highlights

 

·    Revenue up 2% to £224.9m

·    Adjusted profit before tax* up 13% to £22.7m; reported profit before tax of £17.8m

·    Cathedral City and Clover deliver strong revenue growth of +7% and +9% respectively

·    New product innovation across the business

·    Pension surplus increased by £87m on an accounting basis since September 2017

·    Cash generated from operations up 71% to £18.5m

·    Net debt* reduced to £221.4m following the May 2018 share placing; 21% lower than
September 2017

·    Proposed interim dividend up 2% to 6.4 pence

·    Full year expectations remain unchanged

 

Financial summary

 

 

Half year ended 30 September

 

2018

2017

Change

Revenue

£224.9m

£220.1m

+2%

Adjusted profit before tax*

£22.7m

£20.0m

+13%

Profit before tax1

£17.8m

£151.4m

-88%

Adjusted basic earnings per share*

12.3p

11.6p

+6%

Basic earnings per share1

9.7p

87.6p

-89%

Pension surplus

£126.9m

£39.9m

+218%

Net debt*2

£221.4m

£281.4m

-21%

Interim dividend

6.4p

6.3p

+2%

 

 

*Alternative performance measures:

The Group uses alternative performance measures (APMs) as key financial performance indicators to assess the underlying performance of the Group. The APMs are widely used industry measures and form the measurement basis of key targets. Definitions of the APMs discussed throughout this document and a reconciliation to the equivalent reported measure are detailed in Note 13.

 

1 Including an exceptional cost of £4.9m (2017: exceptional gain of £131.4m recognised primarily for the reduction in pension scheme liabilities).

2 For a reconciliation of net debt, refer to note 9 of the interim financial statements.

 

All comparative figures in the interim results announcement relate to the six months ended 30 September 2017.

 

Mark Allen, Chief Executive, said:

 

"We have delivered a good first half performance driven by our two largest brands, Cathedral City and Clover. Demand for our Functional Ingredients continues to grow.

 

"Innovation continues to shape the business and we have recently launched exciting new products in all of our categories. We understand the importance of staying ahead of the market and ensuring we are meeting consumers' needs. Food provenance, health and wellbeing are core themes which we will continue to focus on.

 

"Our investment at Davidstow is progressing as planned. We are pursuing a number of opportunities to take Cathedral City into new international markets as well as deepen its penetration into existing domestic channels, capitalising on its status as one of the UK's top ten brands according to YouGov. We are confident in delivering our expectations for the full year."

 

For further information:

 

Investors/Analysts

 

 

 

Tom Atherton

 

Dairy Crest

01372 472264

Kate Goode

 

Dairy Crest

01372 472236

 

 

 

 

Media

 

 

 

Tim Danaher/Alison Lea

Brunswick

020 7404 5959

 

A video interview with Mark Allen, Chief Executive, and Tom Atherton, Deputy Chief Executive and Group Finance Director, will be available from 07:00 (UK time) from the investor section of the Group's website www.dairycrest.co.uk.

 

There will be an analyst and investor meeting at 09.00 (UK time) today at The Lincoln Centre, 18 Lincoln's Inn Fields, London, WC2A 3ED. An audiocast of the presentation will be available on the Group's website later today.

 

Operating review

 

A high quality British business

Dairy Crest is a leading British dairy company built on a passion to create exceptional food, loved by every generation.

 

Fundamental to our business is the high quality milk which is supplied by approximately 330 farmers in the South West who supply exclusively to us and with whom we have a close working relationship. Our exacting standards ensure that we consistently produce outstanding cheese and whey.

 

Our production, packaging and distribution facilities in Davidstow and Nuneaton are the most advanced of their kind, enabling us to deliver unrivalled quality and consistency. We have a track record of investing in manufacturing excellence, exemplified by our recent announcement to expand production capacity and improve our environmental credentials at our creamery in Cornwall. We recognise that superior facilities deliver significant operational benefits.

 

Cost advantages achieved through an efficient supply chain and the high quality and consistency achieved by our operating facilities allow us to invest in innovation, marketing and promotional activity to create leading brands like Cathedral City.

 

The strength of our business model enables us to deliver a world class cheese business with unrivalled, stable operating margins in spite of fluctuating dairy markets.

 

Key brand performance

 

Brand

Market

Volume growth*

Revenue growth*

 
 

Cathedral City

Cheese

-3%

+7%

 

Clover

Spreads

+8%

+9%

 

Country Life

Butters

-16%

-4%

 

Frylight

Oil

-23%

-22%

 

Total

 

-2%

+4%

 

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