Dairy Crest reports good progress

Dairy Crest has continued to make good progress in the first six months of 2010, the company says. “Trading in the first half of the year has been in line with our expectations and ahead of the same period last year. As anticipated, increased profits in our cheese business have underpinned this growth.”
Sales of key brands and of milk to major retailers have increased in the period and operational efficiencies have been made, along with selling price increases to limit the impact of higher input costs. One contributor to this the recent new long-term fresh milk supply contract with UK supermarket Morrisons.
Five key brands have also seen sales increase compared with the same time last year – Cathedral City, Clover, Country Life, St Hubert Omega 3 and Frijj – particularly light variants. The firm also reported expanded distribution of its
Jugit patented milk jug, and milk in environmentally friendly bags which aid recycling. “We are investing in new production equipment to ensure that we can meet demand going forward,” the report says. “We also continue to make progress with our doorstep internet proposition, milk&more. We have consolidated our position during the first half of the year and are becoming increasingly confident that milk&more can address the long term sales decline in our doorstep delivery business.”
Dairy Crest is also making headway in its investment in liquid milk dairies, along with the project to simplify and centralise the administration in its household depot network. This project will provide substantial savings going forward but will result in some exceptional costs this year. Other cost reduction initiatives, including labour cost savings at UK spreads manufacturing sites, are progressing to plan, and the company expects to see total efficiency savings of around