Dairy Crest profits to rise thanks to 'strong performances' of its biggest brands
Half-year profits at Dairy Crest are set to rise despite high butter costs and a drop in cooking oil use during the UK's heatwave.
The company, which has its innovation centre at Harper Adams University, said it was boosted by "strong performances" from its two largest brands, Cathedral City and Clover, and was expecting to see profit for the six months to September 30 "slightly ahead of the same period last year".
Revenues are also expected to rise at the firm which closed its former Crudgington creamery site near Telford in 2015.
Clover is set to log both volume and revenue growth, extending its positive performance last year.
But the group's Frylight brand was not so lucky, having seen sales drop over the half year due to the unusually hot weather which had an impact on the use of cooking oil across the UK.
The high cost of butter has also forced Dairy Crest to pull back on promotions on its Country Life brand, which has also knocked sales.
Dairy Crest shares were up nearly 1.9 per cent in morning trading.
Innovation
Chief executive Mark Allen said: "Our Cathedral City and Clover brands continue to drive the business forward, supported by an exciting pipeline of new product developments."
The company is now turning its attention to new products that it hopes will account for around 10 per cent of revenues.
Last year "recent innovation" made up around 14 per cent of sales.
Dairy Crest said it is capitalising on snack trends with the launch of two new Cathedral City flavoured snack bars, and would be partnering with Nickelodeon to promote its relaunched kids range.
That is on top of a Cathedral City Lactose Free range to cater to customers with intolerance.
Mr Allen added: "Innovation is the cornerstone of this business and we're looking forward to showcasing a number of examples at our Capital Markets event this week.
"Our Functional Ingredients business is progressing well and we are excited by the potential of the launch of the Promovita GOS 'shot'.
"Our balance sheet is in good shape and we are moving forward with the first phase of the expansion at Davidstow.
"Our expectations for the full year remain unchanged."
