Full-year results for Dairy Crest (DCG) were accompanied by news that the food group had raised £70m through a discounted placing of 14m shares, which duly sent the shares down on results day. The proceeds are to be put towards a four to five-year investment programme designed to boost its annual cheese-making capacity from 54,000 tonnes to 77,000 tonnes. Management said the UK cheese market is expected to grow by around 2 per cent per year, and 65 per cent of the market is still private label (generic own-brand), so "there is plenty of room for further growth". In addition to expansion plans, the placing funds will enable the group to become self-sufficient in its water supply and improve energy efficiency.
Dairy Crest’s Cathedral City cheddar is already the number one brand in the UK with 20 per cent market share. Sales of the brand increased by 6 per cent over the year on the back of 3 per cent volume growth. Elsewhere in the product group, the prebiotic GOS supplement is moving beyond infant formula into sachets for adult digestion, with the potential to expand into a range of products, including yoghurt, dairy beverages and cereals, while work continues on a version of the prebiotic to be used in animal feed, as research indicates it promotes healthier and faster-growing livestock.
| DAIRY CREST (DCG) | ||||
| ORD PRICE: | 494.4p | MARKET VALUE: | £699m | |
| TOUCH: | 493.4-494.6p | 12-MONTH HIGH: | 654p | LOW: 483p |
| DIVIDEND YIELD: | 4.6% | PE RATIO: | 5 | |
| NET ASSET VALUE: | * | NET DEBT: | £266m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 1,390 | 54.2 | 35.8 | 21.3 |
| 2015 | 450 | 36.8 | 21.5 | 21.7 |
| 2016 | 422 | 45.4 | 27.9 | 22.1 |
| 2017 | 417 | 40.3 | 23.7 | 22.5 |
| 2018 | 457 | 179 | 107 | 22.6 |
| % change | +10 | +345 | +350 | +0.4 |
| Ex-div: | 05 Jul | |||
| Payment: | 10 Aug | |||
| *Negative shareholders' funds (includes intangible assets of £107m or 76p per share) | ||||
