31st Jan 2014 09:09
LONDON (Alliance News) - Diary Crest Group PLC Friday said it expects full-year profit to be ahead of expectations after it sold its Nine Elms milk depot in London to Battersea Project Phase 5 Residential Co Ltd for GBP17.6 million.
The diary foods company said it expects profit from the sale of properties to be around GBP18 million this year, GBP10 million ahead of previous expectations, boosting group profit.
Diary Crest said the improved profit will result in additional bonus payments of around GBP2.5 million to its employees.
However, the firm, which makes cheddar cheese and milkshakes, said the challenging market for spreadable butter and margarine will lead to full-year spreads profit being below previous expectations.
Despite challenging conditions Dairy Crest said third quarter trading was broadly in line with expectations.
Sales of the company four key brands Cathedral City, Country Life, Clover and FRijj have grown by 4% over the nine month period ended December 31, 2013.
The firm said innovation has been an important factor in the success of these brands, while new products introduced earlier this year such as Clover Additions and Cathedral City Grated Portion are meeting their targets.
FRijj, the company's flagship milkshake, is expected to grow "for the year as a whole following the successful upgrade of our production facilities in the first half of the year and a strong third quarter".
Diary Crest said it also has continued with initiatives designed to improve the profitability of its diary product group and remains committed to a medium-term target of 3% margin on sales.
"We are on track to deliver cost savings ahead of our annual target of GBP20 million," the firm added.
The company said the sale of the Nine Elm depot in London generated a profit of GBP15 million.
Dairy Crest said it expects to issue its results for the year ending March 31 on May 22.
The stock was trading at 519.50 pence Friday morning, up 8.50 pence or 1.7%
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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