Dairy Crest reports 19pc rise in first half profits

10th Nov 2016 07:49

(ShareCast News) - Dairy Crest reported a 19% increase in adjusted pre-tax profit to £19.1m in the first half as the company underwent a restructuring. Revenue fell 7% to £190m in the six months ended 30 September, reflecting deflationary pressures in its markets.Despite a challenging market, the group saw strong volume growth for key brands Clover, Country Life and Frylight. Dairy Crest also launched new branding and packing for its cheddar Cathedral City.Chief executive Mark Allen said the company is seeing the benefits of its transformation into a "leaner and more focused organisation" with strong profit growth and improved cash generation.Operating cash flow rose by £27.9m to £17.5m.As part of its restructuring, Dairy Crest sold its dairies operations to Germany's Muller last year to focus on Cathedral City, Clover and Country Life and Frylight.The group said following the sale of the dairies business, overheads have been "significantly reduced". "We are driving further efficiencies and cost reductions, including the implementation of new, simplified IT systems," the company said.To help slim line the business, Dairy Crest has also disposed of an ex-manufacturing facility in Fenstanton, Cambridgeshire, which should be complete before 31 March 2017.Dairy Crest has ramped up investment in its Davdstow brand, which it believes will provide more growth opportunities in high margin, global infant formula markets as well as the potential to develop new functional ingredients."Combined with our continued focus on innovation within our key brands, this will underpin future growth and help us to maintain our strong track record of rewarding shareholders with higher dividends," said Allen.Dairy Crest left its full year expectations unchanged. It raised its interim dividend by 2% to 6.2p.