Dairy Crest profit rises despite challenges in butters business

Dairy Crest posted a rise in first-half revenue and profit thanks to good growth across its brands and despite challenges in the butters business.

In the six months to 30 September, adjusted pre-tax profit was up 8% to £20.6m, on revenue of £220.1m, up 16% from the first half of last year.

The company declared an interim dividend of 6.3p per share, up from 6.2p.

Volumes in Cathedral City and Frylight were up 10% in the period, while Clover volumes rose 2% but Country Life volumes declined 14%. Dairy Crest said its butters business continues to face significant cost pressure, with cream prices, which determine input costs, hitting record highs in the period of close to £3.00 per litre.

The wholesale cream price rose by 65% over the twelve months to 30 September, although it has fallen in the past weeks.

Chief executive Mark Allen said: “We have had an encouraging first half, with Cathedral City, Clover and Frylight delivering good growth in both volumes and value. Cathedral City, the nation's favourite cheese, continues to go from strength to strength and has produced exceptional growth over the period.

"We have delivered good profit growth despite a record high cream price, which has a temporary but significant impact on input costs in our butter and spreads business.”

The group added that although butter input costs will continue to be challenging for the rest of the year, it is confident of delivering on its full year expectations.