Cathedral City was the standout performer at the half-year for Dairy Crest (DCG). The cheddar brand increased volumes by 10 per cent compared with 3 per cent growth in the wider cheese market. This helped boost Cathedral City’s market share by 1 per cent to 56 per cent of all branded cheddar sold by UK retailers – three times the size of the second-place brand.
This strong performance in cheese helped to offset a tougher butter market, where record high cream prices of £3 per litre increased input costs. Scaling back promotional activity on the Country Life brand has helped to mitigate the impact on margins, but caused a 14 per cent decline in sales volumes. The company is also making strides with its gadolinium oxysulfide (GOS) product. It’s currently used in infant formulas, but further information on tests with animal feed and adult nutrition products will be available later in the year.
Analysts at Numis expect pre-tax profits of £64.7m in the year to March 2018, giving EPS of 37.6p, compared with £60.6m and 35.2p in FY2017.
| DAIRY CREST (DCG) | ||||
| ORD PRICE: | 592p | MARKET VALUE: | £836m | |
| TOUCH: | 590-592p | 12-MONTH HIGH: | 654p | LOW: 540p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 6 | |
| NET ASSET VALUE: | * | NET DEBT: | £281m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 190 | 15.6 | 7.3 | 6.2 |
| 2017 | 220 | 151 | 87.6 | 6.3 |
| % change | +16 | +871 | +1100 | +2 |
| Ex-div: | 04 Jan | |||
| Payment: | 25 Jan | |||
| *Negative shareholders' funds (includes intangible assets of £104m, or 73p a share) | ||||
