Dairy Crest brands take ‘significant’ market share

Cathedral City owner, Dairy Crest, reported in-line financial expectations for the full-year

Dairy Crest’s Clover, Frylight and Country Life brands took “significant share” in their respective markets over the past nine months, the dairy firm said in its third-quarter trading update, with analysts predicting a pre-tax profit of £61.5M.

Its financial outlook for the full year remained “in line with expectations”, Dairy Crest claimed. Analyst Shore Capital welcomed Cathedral City’s improved performance, with third-quarter sales ahead of the same period last year.

Shore Capital analysts Darren Shirley and Clive Black said: “We are encouraged that Dairy Crest can report key brand volumes over the nine month period ‘in line with the same period last year’ given the structural headwinds that remain in the spreads category.

‘Modest 2–3% decline’

With key branded volumes reported ahead 2% in [the first half], this implies to us a modest 2–3% decline over the [third-quarter] period.”

Inflation – owing to the weak value of the pound – meant costs increased over the past three months, Dairy Crest said. Therefore, its price paid to milk farmers increased to 8.28p – a 38% increase. Increased input costs for its butter business meant net debt was expected to be about £12M more than predicted.

Dairy Crest chief executive Mark Allen said: “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.

‘Significant improvement’

“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.”

Allen said the research partnership with Danisco Animal Nutrition – to explore potential uses of a prebiotic for an infant formula – marked a “significant step” in developing products “beyond infant formula”. This had exciting potential for the future, he added.

Meanwhile, in its last trading update, Dairy Crest reported a 19% rise in profit before tax to £19.1M. In the half-year trading update, the dairy producer said its rebranded Cathedral City boosted its balance sheet.


Dairy Crest results – at a glance
  • Net debt to increase about £12M due to inflation
  • Key brands take “significant” market share
  • Increased percentage level of demineralised whey meeting infant formula grade

Related News

Dairy and nutrition firm Danone launched an efficiency plan to save €1bn

Danone launches €1bn cost-saving scheme

Dairy does not contribute to obesity, The Dairy Council claimed

Dairy foods can ‘break the obesity cycle’

Demand is a little less robust for domestic cheese, director of Blimling & Associates said at the ADPI/ABI Annual Conference 2017. ©iStock/margouillatphotos

‘Demand is a bit off’ for dairy, Blimling & Associates director says

Advice to reduce dairy in the daily diet from 15% to 8% has been challenged

Dairy sector fights back against ‘demonisation’

Greencore share price fell 20p last week

Greencore shares fall 7.5% after US customer deal

Dairy Crest announced its full year results this week

Dairy Crest posts £2.9M profit growth

Dairy should take high priority in Brexit negotiations, urged Dairy UK

Trade body urges priority for dairy in Brexit negotiations

Dairy Crest's key brands reported a combined 7% rise in sales

Dairy Crest posts sales rise as butter costs soar

Multiple studies suggest milk and dairy foods may play a neutral or protective role in heart health

Dairy nutrition undervalued: trade body

Yogurt mixes: it will be the first time EasiYo has been made outside New Zealand

Dairy ingredients maker in New Zealand yogurt deal

FJ Need would be sold to Irish dairy exporter Ornua

Irish dairy exporter to buy Cheshire cheesemaker

Vitessence Pulse CT: the two new flours are made from pea and broad bean

Protein packed pulses range for dairy and beverages

Soy: there is strong evidence to show it can benefit cardiometabolic health

Plant-based foods: land of milk and money

Arla's Aylesbury site received £3.5M of its UK-wide investment

Arla Foods pledges £37.5M for UK sites in 2017

More than 300 jobs are to be axed after Müller closures

Müller to cut more than 300 jobs

Cheese plant opening: Roy Grocott, chairman (l) with Linda Grocott, joint md, Michiel de Jonge, senior vice president at Arla Global Logistics, and David Grocott, joint md

Arla opens cheese storage and maturation facility

Undernourishment is a potential problem for 40% of hospital patients, DuPont says

Protein-rich sherbets for hospital patients

Submit a comment

Your comment has been saved

Post a comment

Please note that any information that you supply is protected by our Privacy and Cookie Policy. Access to all documents and request for further information are available to all users at no costs, In order to provide you with this free service, William Reed Business Media SAS does share your information with companies that have content on this site. When you access a document or request further information from this site, your information maybe shared with the owners of that document or information.