Dairy Crest milks its key brands to raise profits

DAIRY Crest, the maker of Clover and Cathedral City, told investors yesterday that efforts to focus on its key brands paid off as half-year profits rose despite a tough dairy and doorstep market.

The group, whose brands also include Country Life butter and Frijj milkshake, reported a 5 per cent rise in underlying pre-tax profits to 40.1 million for the six months to 30 September.

It said higher profits in cheese - up 58 per cent to 12.5m - "more than offset" a lower performance in its dairies, which are battling against a highly competitive milk market.

Higher selling prices and efficiency savings also helped shore up results in the face of rising input costs, with profits increasing in spite of a 3 per cent fall in revenues.

Targeted advertising and promotions saw sales across its five key brands grow 5 per cent against a year earlier.

The best performers were Cathedral City and St Hubert Omega 3, which delivered increases of 10 per cent and 7 per cent respectively.

Sales of Country Life - recently boosted by a promotional drive including "Great British Butter" adverts featuring former Sex Pistol John Lydon - rose 2 per cent, but were held back by "significant" price hikes in the first quarter, it said.

Its dairies arm suffered a more difficult first half as profits dropped 24 per cent to 10.9m.

It is concentrating on major retail contracts to combat a declining and competitive middle-ground milk market, which covers smaller retailers, independents and food service companies.