Dairy Crest Regulatory News (DCG)

5 May 2005 07:00

Dairy Crest Group PLC05 May 2005 5 May 2005 Dairy Crest Group plcWm Morrison Supermarkets milk supply and acquisition of Starcross Foods Dairy Crest announces today that it has been successful in the review by WmMorrison Supermarkets of its fresh milk supply arrangements. The company hasbeen informed that its share of the supermarket group's fresh milk supply willincrease from approximately 30% to approximately 50%. The new business isexpected to take effect from 3 October 2005. Separately Dairy Crest is today announcing the acquisition of Starcross FoodsLimited ("Starcross") for a consideration of £16.9 million (including debt onacquisition of £9.1 million). The consideration will be financed out of existingbank facilities. Starcross is a modern dairy in Foston, Derbyshire opened in May2002 with current processing capacity of up to 100 million litres of milk perannum. Drummond Hall, chief executive, Dairy Crest Group said: "We are delighted to have been awarded increased volume by Morrisons. This isnot only good news for Dairy Crest but also good news for our farmer suppliers.We look forward to developing our relationship further with Morrisons in thefuture. The acquisition of Starcross reinforces our commitment to the retail milkbusiness and our customers. Starcross is an advanced modern facility, which willsignificantly extend our geographical footprint across England and Wales tocover most of the major northern conurbations. This better aligns our businessto Morrisons and our other customers' requirements and will strengthen DairyCrest's competitive position. These two important developments will underpin the future of our dairiesbusiness. Over the coming months we will continue to look for furtheropportunities to strengthen our fresh milk operation." Dairy Crest expects to announce its preliminary results for the year ended 31March 2005 on 25 May 2005. For further information: Dairy Crest Group plc Will Shaw Investor Relations 01372 472477Sinead Noble Media 01372 472249 Brunswick William Cullum / Laura Cummings 020 7404 5959 This information is provided by RNS The company news service from the London Stock Exchange