Highlights

• Transformational sale of Dairies operations will complete on 26 December 2015
• Strong first half performance from Cathedral City (sales +7%) and Frylight (sales +37%)
• Overall sales of four key brands in line with last year despite deflationary environment
• Commence sales of demineralised whey and galacto-oligosaccharide in H2
• Strong cash generation – reported net debt has now peaked as cash drain of Dairies ends and future capital expenditure in ongoing business reduces significantly
• Refinancing completed – new £240 million revolving credit facility in place
• Interim dividend up 2%
• Full year expectations for continuing business unchanged

Financial Summary

Half year ended 30 September
-	2015	2014	Change
Revenue 1 :	£203.8m	£215.3m	-5%
Adjusted profit before tax 1, 2 :	£16.0m	£25.7m	-38%
Profit before tax 1 :	£13.1m	£15.0m	-13%
Post-tax loss on discontinued operations3 :	£(16.7)m	£(2.5)m	-568%
Adjusted basic earnings per share1, 2 :	9.3p	14.9p	-38%
Basic earnings per share 1 :	7.6p	8.6p	-12%
Cash generated from / (used in) operations:	£22.3m	£(20.6)m	+£42.9m
Net debt:	£242.3m	£209.6m	+16%
Interim dividend:	6.1p	6.0p	+2%

_{1 From continuing operations}

_{2 Before exceptional items, amortisation of acquired intangibles and pension interest}

_{3 After tax, before exceptional items}

Mark Allen, Chief Executive, said:

“The sale of our Dairies operations leaves Dairy Crest well positioned for long term profitable and sustainable growth alongside strong cash generation. We expect this to start in the second half of 2015/16 despite the continuing challenging environment.

“In the first half of the year Cathedral City has continued to go from strength to strength and has again grown sales and market share.

“A strong performance from Frylight has helped us maintain margins in our Spreads and Butters business. We have clear plans in place to address the performance of Clover and Country Life.

“We highlighted early in the current financial year that profits would be weighted towards the second half. With the benefit of lower cheese costs and an expected improved performance from our Spreads and Butters business in the second half, our full year expectations remain unchanged.

“Following the sale of our Dairies business, Dairy Crest will be a predominantly branded, simpler, more focused business with a significantly reduced overhead base. Future sales of ingredients for infant formula, which will start in the second half, will provide added impetus.
We expect the increased focus on growth and cash generation to allow us to maintain our strong track record of rewarding shareholders with higher dividends.”

For further information:

Dairy Crest Group plc
Arthur Reeves 01372 472236
Olivia Seccombe 01372 472249

Brunswick
Laura Buchanan / Rebecca Lum 020 7404 5959

A video interview with Mark Allen and Tom Atherton, Group Finance Director, will be available from 07:00 (UK time) from the investor section of the Group’s website investor.dairycrest.co.uk.

There will be an analyst and investor meeting at 8.30 (UK time) today at The Lincoln Centre, 18 Lincoln’s Inn Fields, London, WC2A 3ED.

An audiocast of the presentation will be available from the investor section of the Group’s website investor.dairycrest.co.uk later today.

View the full press release