Dairy Crest Regulatory News (DCG)

23 Mar 2005 07:00

Dairy Crest Group PLC23 March 2005 23 March 2005 Dairy Crest Group plc Trading Update In line with its normal practice, Dairy Crest is issuing the following tradingupdate prior to meeting with equity analysts and entering its close period forthe full year ending 31 March 2005. The Group has traded well in the year and continues to be highly cashgenerative. Overall, we expect adjusted Group profit before tax (beforeexceptional items and goodwill amortisation) to be in line with marketexpectations. The spreads business has continued to make good progress and our key brands -Clover, Utterly Butterly, St Ivel Gold and Country Life - have all deliveredsales growth year on year. As expected volumes have been impacted by theretailer trend towards "Every Day Low Pricing" which has reduced the opportunityfor promotional activity. Country Life, where we now have full ownership of thebrand, has performed particularly well showing strong volume and value growth. Market prices in cheese have held up on the back of lower industry stock levels.We recently won a major contract to supply ASDA with all of its own labelcheddar and other British cheeses. Cathedral City has reinforced its positionas the UK's leading branded cheddar, gaining market share after a strongperformance over the year. The Yoplait brands continued their strong performance and also increased marketshare. All the key brands - Petits Filous, Frubes, Wildlife, YOP and WeightWatchers - have achieved good year on year sales growth. As previouslyannounced, Yoplait Dairy Crest has decided to focus its future development onits branded products. As a result the own label yogurt and desserts productionsites at Enfield and Yeovil will be closed by the summer. As expected, the performance of the liquid products business has been impactedin the second half by the competitive retail environment and higher fuel andplastics costs. Discussions continue with a number of customers over new supplyproposals for increased volumes to replace the Tesco retail milk business whichwill cease in April. We have recently achieved price increases from a numberof major retail customers to cover higher industry costs. We are now indiscussions with Dairy Crest Direct and our other milk suppliers over our milkprices following these moves. The household business has performed well with an overall increase in volumesfollowing business gains in the middle ground and the continued success of theprogramme of infill acquisitions. Our increased canvassing activity has helpedreduce the underlying annual decline rate in doorstep, now at around 8%. The Group is finalising its preparation for the impending move to IFRS for thefinancial year ending March 2006. The Group intends to provide restatedcomparative numbers on an IFRS basis for 2004/05 around the time of thepreliminary results. CEO Drummond Hall commented on the full year's trading: "Despite an extremely competitive environment, this has been another solid yearof trading for Dairy Crest and we expect results to be in line withexpectations. Strong cash generation and investment in brands have continued tobe important features of this performance." Preliminary results for the year ending 31 March 2005 will be announced on 25May 2005. For further information, please contact: Dairy Crest Group plc 01372 472200Drummond Hall, Chief ExecutiveAlastair Murray, Finance Director Will Shaw, Investor RelationsSinead Noble, Media Brunswick 020 7404 5959William Cullum This information is provided by RNS The company news service from the London Stock Exchange