The company saw profit before tax rise 5% to £87.6m and earnings per share up 6% to 47.1p for the year. Total sales were down 2% to £1,605m.
Analyst Damian McNeela of Panmure Gordon said: “They are a good set of numbers, with strong growth in cheese profitability, up 66% this year which offsets the 1% decline in spreads and a 22% decline in dairy.”
Darren Shirley of Shore Capital said results were in line with expectations. Achievable price increases of c2.5-3.0% were required across the business in the current year to offset management predictions that input costs would rise around £65m in the year, he said in a note.
Acquisitions and innovation
Dairy Crest said in its results announcement that its strategy was to continue to step up the pace of innovation, building on the success of products such as lighter cheese and environmentally friendly milk in bags .
It would also continue to look for organic growth and make acquisitions and disposals to generate value for the business, it said.
A spokesman told FoodManufacture.co.uk: “We have paid our debt down and said we interested in making an acquisition which has synergies with our existing business. We have not found anything so far.”
Any acquisition would be a chiller cabinet product, he added.
Efficiency overhaul
Dairy Crest also revealed that it has started an overhaul of its 130 doorstep milk delivery depots to make them more efficient.
No figure was available as to the number of job losses involved, the spokesman said. However, the cost was £3m in the year, mainly due to redundancy costs, with a further £4m budgeted for the year to 2011/2.
The spokesman said: “With our online Milk & More service for example milkmen do not collect cash. The redundancies will come in the back office connected with this sort of thing. We are very happy with the number of depots and we are not looking to close depots.”
Dairy Crest also announced this week that it to consolidate the production of the dairy spread Clover at its site in Kirkby, Liverpool, with a net loss of 45 jobs.
The manufacture of the spread is currently split between Kirkby and Dairy Crest’s Crudgington factory and technical centre in Shropshire.
Takeover rumours
Commenting on City speculation, analyst Damian McNeela added that he did not think that Dairy Crest would be a takeover target in the near future. “You can't rule out any takeover, given Dairy Crest's strong brands. But buyers such as Groupe Lactalis are tied-up at the moment and I wouldn't expect Muller to make an approach either."