Dairy Crest spreads the risk with a payout knife

DAIRY Crest, the maker of Cathedral City cheese, took a knife to its dividend yesterday as the group pledged to keep cash for investment in its brands.

The firm, which also makes Clover spread and Country Life butter, announced a 25 per cent reduction in its full-year pay-out after recording an 8 per cent fall in adjusted profits to 79.5 million for the year to 31 March.

Dairy Crest said its leading brands achieved good growth in the period but, in light of an increased pension deficit and the sale of its 49 per cent stake in Dairy Crest Yoplait, the firm had reviewed its dividend policy.

Stripping out the impact of exceptional items, Dairy Crest said pre-tax profits were 56 per cent higher at 103.2m. Turnover increased 5 per cent to 1.65 billion as a result of volume growth and higher prices.

The firm's spreads brands – Clover and Country Life – grew volumes by more than a quarter as a result of increased expenditure on advertising. Country Life's campaign featured Sex Pistols singer John Lydon.

The company said Cathedral City was now the UK's 21st largest food and drink brand after annual retail sales topped 190m. Full-year sales were 20m when the company bought the brand in 1995.