Dairy Crest Group Plc, Britain's largest dairy food company, said on Wednesday that its full-year profit rose by 3%, helped by strong demand for its Cathedral City cheese brand.
Cheese volumes rose 3%, and revenue from the business came in 24% higher, while total revenue rose 10%, to £456.8 million.
Expanded Production
The company said that it would expand its cheese production facility at Davidstow, in south-west England, to 77,000 tonnes from 54,000 tonnes a year by raising cash through a share placement.
It would place 14.1 million ordinary shares, or about 9.98% of current issued shares, at a price of 495 pence per share.
"This has been a year of considerable progress for Dairy Crest," said Mark Allen, chief executive.
"We have delivered a strong performance, broadly maintaining our industry-leading margins against a backdrop of unprecedented cost inflation in the butters market. Our brands are in good shape. Cathedral City has had a good year growing value, volume and market share, and we see plenty of room for further growth for this industry-leading brand. We have seen good momentum in revenue growth going into the new financial year," Allen added.
The cost of the expansion is expected to be £85 million and will be carried out over the next four to five years, Dairy Crest said.
Profit Gain
The milk processor reported an adjusted profit before tax of £62.3 million for the year ended 31 March – higher than the £60.6 million posted a year ago.
The butter-, cheese- and cooking-spray-maker said that its key brands – Cathedral City, Clover, Country Life and Frylight – delivered revenue growth of 6% in the year.
Frylight – the one-calorie cooking spray business that it bought in 2011 – posted a 12% volume growth.
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