Dairy Crest publishes results
2015/2016 has been a significant year for Dairy Crest. It successfully sold its dairies business and completed a programme of investment in functional ingredients manufacture at the Davidstow facility in Cornwall.
The business is well positioned to generate cash and deliver attractive margins that should improve in the future, the company says. It posted a solid financial performance despite deflation in dairy markets.
Commenting on the results, Mark Allen, chief executive at Dairy Crest, says, “This is an exciting time to be leading Dairy Crest. Although we expect food price deflation to persist in the short term, the business is well positioned to deliver profitable and sustainable growth.
“We are making progress with all of our four key brands and the continued investment we are putting behind them this year gives me confidence that we can continue to grow their market share. The other focus for 2016/17 will be on accelerating sales of demineralised whey and GOS, the new infant formula ingredients and continuing to explore further applications for GOS. Future cash generation will improve as the sale of our dairies business and completion of the investment at Davidstow removes a significant drain on cash.”
Highlights include:
- Combined volumes of four key brands up 2%
- Cathedral City grows revenue and volumes in a period of continuing, significant price deflation
- Improved Clover and Country Life performance in the second half of the year; Frylight continues to grow strongly
- Profit margins from continuing operations maintained after a strong second half of the year
- Production and sales of demineralised whey and galacto-oligosaccharide have commenced
- Transformational sale of dairies business completed on 26 December 2015
- Strong underlying cash generation from the continuing business
- Proposed final dividend up 1.9% to 16.0 pence
