UK dairy processor sees profits slump by 60%
UK milk processor Dairy Crest recently released its end of year financial results, which showed that profit before tax has fallen by nearly 60%.
Despite a £10.8m increase in profit for its cheese and spreads division, profit from the Dairies division fell 90% to £1.8m.
The sharp decline in profitability of the Dairies division is mostly due to costs linked to the proposed sale of the division and for rationalising sites, totalling £16.1m.
If these costs are excluded, operating profits for the dairy division fell by 5%.
Last year, Dairy Crest announced that it was to sell the assets of its dairy operations to Müller UK and Ireland Group for £80m.
Looking ahead, Dairy Crest said it is well positioned for sustainable, profitable growth.
Over the coming year as a whole it expects results to benefit from the continued growth of its brand Cathedral City, ongoing cost savings and the completion of our project at Davidstow where we will add value to our whey stream by producing ingredients for infant formula.
This growth will be second half weighted, it said.
Commenting on the results, Mark Allen, Chief Executive, Dairy Crest Group plc said the company expects that our net debt, which at the year end remains within our target range, will fall once it has completed its major investment projects.
“The receipt of the proceeds from the sale of our Dairies operations will accelerate this reduction,” he said.