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Dairy Crest profit falls as milk business still struggles
November 8, 2012 / 7:32 AM / 5 years ago

Dairy Crest profit falls as milk business still struggles

Nov 8 (Reuters) - Britain’s Dairy Crest Group Plc, the maker of Cathedral City cheese, reported a 16 percent fall in first-half profit as its core milk business continued to struggle.

April-September adjusted pretax profit fell to 19.1 million pounds ($30.54 million) from 22.7 million pounds a year earlier.

Revenue fell 7 percent to 688.2 million pounds. Revenue from dairies, which accounts for three-quarters of total revenue, was down about 11 percent.

UK’s dairy industry has been rocked by widescale protests by dairy farmers demanding higher prices from milk processors and supermarkets.

Milk processors such as Dairy Crest are struggling to protect margins in the milk business as they grapple with pressure from farmers asking for better prices, supermarkets looking for heavier discounts and ruthless undercutting by competitors.

Dairy Crest’s higher-margin dairy foods business, which makes cheese and spreads, has compensated for the decline in its milk business.

The company said total sales of its four key brands - Cathedral City, Country Life, Clover and Frijj - were up 11 percent during the period.

The company said in September that trading in the first half of the year was challenging and that it expected profit, adjusted for the sale of its St. Hubert business to be lower than last year.

Dairy Crest sold its St Hubert spreads business in France for 430 million euros to focus on its brands in the UK.

Shares in the company closed at 355.6 pence on the London Stock Exchange on Wednesday.

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