21st May 2015 08:01
LONDON (Alliance News) - Dairy Crest Group PLC's shares dropped Thursday after it reported a huge fall in profit in its recently-ended financial year as it booked various costs relating to investments and disposals, and as revenue fell due to further struggles in its Dairies and its Spreads And Butter businesses.
Shares in Dairy Crest shed 3.4% at 500.50 pence early Thursday.
The dairy company reported a drop in pretax profit for the year ended March 31 to GBP22.1 million, less than half of the GBP54.2 million profit it made the prior year, as it booked a GBP36.3 million charge associated with investments, site disposals, the sale of its Dairies operations and the consolidation of Spreads and Butter production in Kirkby and Severnside.
Revenue declined 4% to GBP1.3 billion from GBP1.4 billion, as a sales rise of 3.7% in the Cheese and Whey business was offset by a 4.2% decline in Spreads and Butter and a 6.7% decline in the Dairies business.
Dairy Crest is selling its struggling Dairies operations to Müller UK & Ireland Group for GBP80 million and said the sale will result in Dairy Crest becoming a "much simpler, more focused, predominately branded business".
Dairy Crest will pay a total dividend of 21.7 pence, up 2% from the prior year.
"Looking ahead, Dairy Crest is well positioned for sustainable, profitable growth. Over the coming year as a whole we expect results to benefit from the continued growth of Cathedral City, ongoing cost savings and the completion of our project at Davidstow where we will add value to our whey stream by producing ingredients for infant formula. This growth will be second half weighted," Chief Executive Mark Allen said in a statement.
"We expect that our net debt, which at the year end remains within our target range, will fall once we have completed our major investment projects. The receipt of the proceeds from the sale of our Dairies operations will accelerate this reduction," he added.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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