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Trading update for the nine months ended 31 December 2018

31/01/2019

Strong Third Quarter; Full Year In Line With Expectations

Dairy Crest is today issuing a Trading Update for the nine months ended 31 December 2018. 

The company’s key brands - Cathedral City, Clover, Country Life and Frylight - all delivered strong volume and revenue growth for the third quarter ended 31 December 2018. On a combined basis, the four brands generated revenue growth of around 10% for the third quarter and 6% for the nine months ended 31 December 2018.

In line with our expectations at the time of the Interim Results, Cathedral City had a particularly good third quarter. Both volume and revenue grew by around 10%, helped in part by new product launches, including flavoured snack bars, Lactose Free and a refreshed kids’ snacking range.

Dairy Crest’s spreads brands continue to gain market share. Clover Light with no artificial ingredients was launched in August 2018 and has been voted ‘Product of the Year’ in the UK spreads category in the world’s largest consumer survey for product innovation.

Frylight returned to double digit volume and revenue growth in the third quarter, although over the nine month period the brand declined due to the challenging first half of the year.

Following a reduction in cream prices, we started to promote Country Life again which led to positive volume and revenue growth in the quarter. The partnership with English Heritage offering 2 for 1 entry began this month.

Demand for our functional ingredients – demineralised whey powder and galacto-oligosaccharides (GOS) – continues to increase. In January 2019, daily Promovita GOS ‘shots’ for consumers went on sale for the first time.

There is significant uncertainty around Brexit and the impact of a potentially disorderly exit is hard to predict. Whilst our supply chain and customer base are primarily located in the UK, we are taking steps to reduce our exposure, including accelerating the purchase of ingredients and packaging materials.

Notwithstanding this, the outlook for the full year remains in line with our expectations.

Mark Allen, Chief Executive of Dairy Crest, commented:

“Our key brands have delivered exceptional performance in the third quarter with all four generating both volume and revenue growth. Demand for our functional ingredients is also increasing, with positive implications for price.

“We have launched several major innovations during the past nine months. It is gratifying to have received external validation of one our most technologically advanced achievements, Clover Light with No Artificial Ingredients, by winning ‘Product of the Year 2019’. This is the third consecutive year that one of our products has been awarded this accolade.”

Dairy Crest will issue its Preliminary Results for the year ended 31 March 2019 on 23 May 2019. 

For further information:

Investors/Analysts                                                                                                   

Tom Atherton                                  Dairy Crest                                                  01372 472264

Kate Goode                                    Dairy Crest                                                  01372 472236

                                                                                                                              

Media                                                                                                                      

Tim Danaher/Alison Lea                 Brunswick                                                      020 7404 5959