Dairy Crest Regulatory News (DCG)

20 July 2010

Dairy Crest Group plc ("Dairy Crest")

AGM and Interim Management Statement 

Anthony Fry, Chairman of Dairy Crest, will make the following Interim Management Statement at the Company's Annual General Meeting later today.

A solid start to the year

Dairy Crest has started the year well and trading in the first quarter of the year has been in line with our expectations. We continue to make good progress with our strategy to grow added value sales and reduce costs and borrowings.

Growing added value sales

Our strategy of investing in our five key brands (Cathedral City, Country Life, Clover, Frijj and St Hubert Omega 3) continues to deliver growth. Total sales of these brands have increased by 3% compared to the same period last year. This builds on the excellent growth that these brands have achieved over the last three years.

We have also continued to make good progress with sales of liquid milk to our major retail customers. In particular, sales of milk in bags, using our innovative, patented jug, Jugit, are growing strongly. In addition to national distribution with Sainsbury's, we have recently started a trial with Tesco and are also increasing sales to our doorstep customers. Our doorstep delivery internet proposition, milk&more, continues to develop well.

Cost reduction projects going to plan

We are implementing our plans to drive costs down across the business. The recently announced investment in our liquid milk dairies is on track to improve efficiencies and provide additional capacity. The project to simplify and centralise the administration in our Household depot network is moving forward and we have also identified further efficiency savings in our UK Spreads business. Overall, we expect to make annual savings in line with last year.

Ongoing debt reduction

We have maintained good progress on managing our cashflow into the first quarter of 2010/11 and we expect this to deliver a meaningful reduction in our year-end debt. As previously announced, we have reduced our stake in Wexford Creamery Limited to 30%. The cash proceeds from this transaction of €9 million have been used to repay debt.

Mark Allen, Chief Executive, commented:

"Dairy Crest continues to benefit from being a broadly based business. At the start of the year we set out our objective to increase profits, generate cash and further reduce our borrowings and our performance in the first quarter is in line with our expectations. We remain well placed to deliver over the rest of the year. "

Dairy Crest's Annual General Meeting will be held today at 11.00 a.m. at the offices of Eversheds LLP, 1 Wood Street, London EC2V 7WS.

The Group expects to issue its half-year trading update on 30 September 2010 and its Interim Results for the six months ending 30 September 2010 on 11 November 2010.

For further information:

Dairy Crest Group plc