Dairy Crest bounces back into the black
Dairy Crest today revealed a big return to profit – just days after it announced plans to close its depot in Telford.
The firm swung to a £19.7 million pre-tax profit for the six months to the end of September, from a £13.1 million pre-tax loss in the same period in 2012.
But despite the improved figures revealed today, a "small number" of jobs remain at risk of redundancy at the firm's depot in Halesfield, which will shut on November 30.
Dairy Crest said "every effort" will be made to secure the workers alternative employment at its other depots.
The company has declined to put a figure on the number of jobs involved.
Today's profit turnaround comes on the back of a drive to reduce costs, which is also seeing Dairy Crest closing its Crudgington dairy over the next year.
The company's revenue actually fell in the period, dropping by two per cent to £672.2 million, while profits from ongoing operations, excluding the plants which have been sold or closed and not including exceptional costs, fell seven per cent to £27 million.
Chief executive Mark Allen said: "Dairy Crest has had a steady first half.
"Despite the challenging environment we have continued to grow our key brands through innovation and reduce our cost base."
Although the Clover and Cathedral City cheese manufacturer has vowed to press ahead with the Crudgington closure, in September it was announced that 40 jobs had been saved through a new partnership between Dairy Crest and Harper Adams University.
The cost of restructuring the business, including the Shropshire plant's closure, cost the firm £1.8 million in the six month period covered by today's report, with £1.5 million coming from the reorganisation of its butter and spreads division, leading to the end of operations at the Crudgington creamery.
Further exceptional charges of approximately £5 million are expected in the second half of the year across both of these projects.
Meanwhile, sales of the firm's strongest brands – Cathedral City cheese, Country Life butter, Clover spread and FRijj milkshakes - were up by one per cent despite the comparison with a strong performance for the first half of last year when sales increased by 11 per cent.
Today's improvement has led Dairy Crest to increase its interim dividend payout to shareholders by 3.5 per cent to 5.9p per share.
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