Dairy Crest swings to full year loss

Cheese and milk producer Dairy Crest reported a £10.1m loss compared to a £77.8m profit the year earlier, after it incurred impairment charges at its dairies business.

For year ended 31 March 2012 revenue increased 2% to £1.6bn while adjusted pre-tax profit was unchanged at £87.4m. Exceptional non-cash impairment charges in Dairies of £81.7m led to the reported loss, the group said.

Cash generated from operations fell to £84.5m from £128.1m the previous year.

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Commenting on the results, chief executive Mark Allen said, "In the current financial year, we are seeing continued strong momentum in our Foods businesses and we expect Dairies to benefit from the decisive action we are taking and our continued discipline on costs."

"Double digit growth in our branded Spreads and Cheese businesses has offset unsatisfactory results in Dairies."

Sales of its five key brands, were up 11% and included record market shares for Cathedral City and St Hubert in the fourth quarter.

Allen concluded, "We will continue to take decisive strategic action and proactively shape Dairy Crest for the long-term. In March 2012 we announced a strategic review of our French spreads business, St Hubert, which is progressing and since the year end we have also announced a series of actions to restore our Dairies business to a satisfactory level of profitability in the medium term."

Dairy Crest has proposed a final dividend of 14.7p per share, up 4%.

CJ