UK dairy firm Dairy Crest says it remains confident that its full-year results will meet expectations after experiencing a "continuing difficult trading environment" in the first six months of the financial year.
Dairy Crest’s Dairies Division had a particularly challenging first-half, prompting analysts to back the firm’s recent efficiency and productivity drive.
"Improvement in Dairies profitability, where a return on sales of about 3% is targeted, alongside more competitive Spreads capability plus progress in the performance of core branded activities most notably Cathedral City make for potentially brighter financial returns from Dairy Crest," said Shore Capital analysts Dr Clive Black and Darren Shirley in statement published
.
Black and Shirley added that the £348 million generated from the sale of its St Hubert business would provide Dairy Crest with a "more robust constitution”.
Last month, Dairy Crest announced that first-half profits for its milk business sank 16%. Adjusted pre-tax profit fell to £19.1 million in the half ending 30 September, down from £22.7 million during the corresponding period last year.
Revenue slipped from £739.1 million to £688.2 million.
“The decisive actions we have taken during the period leave us well placed as we move forward. The sale of St Hubert has created a more focused business and a much stronger balance sheet,” said Mark Allen, Dairy Crest’s chief executive.
"Despite the challenging environment we have continued to grow our key brands. We have reduced our cost base and made improvements to our Dairies business. We expect this to benefit future profitability.
"We remain confident that full- year performance will be in line with our expectations."
