Dairy Crest pretax profit down 7 percent

Source: Reuters

Date :10/11/2008 09:37:41

(Reuters) - Dairy Crest Group posted a 7 percent fall in first-half pretax profit, mainly on costs related to the disposal of its speciality cheese business, and warned its full-year underlying pretax profit will be 10 percent lower than last year.

"We expect business performance to be impacted by the current downturn, weaker returns from dairy ingredients and lower realisations from the sale of surplus properties," the chilled-foods company said in a statement.

For the six months ended September 30, the company posted a pretax profit of 28.4 million pounds, compared with 30.6 million last year.

The company incurred a loss of about 4.4 million pounds on disposal of its Stilton and speciality cheese business and an impairment charge of 1.1 million pounds related to certain plant and equipment at its Nottingham dairy, whose closure was under consideration.

Revenue from continuing operations increased to 808.2 million pounds from 761.4 million a year ago, helped by product-price increases.

Analysts on average had expected the company to post a first-half pretax profit of 25.6 million pounds on revenue of 822.7 million, according to Reuters Estimates.

The company said it expected to continue to be hit by weaker returns from dairy ingredients in the second half.

"Markets have fallen faster than anticipated in recent weeks without a compensating reduction in farmgate milk prices," it said.

At 8:25 a.m. British time, shares of Dairy Crest, which makes Cathedral City cheese, Yoplait yoghurts and Clover low-fat spread, were down 60 pence at 270.0 pence on the London Stock Exchange.

(Reporting by Tresa Sherin Morera in Bangalore; Editing by Vinu Pilakkott)