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Dairy Crest Sees Higher Profit, Revenues In H1; FY View Unchanged

British dairy company Dairy Crest Group plc (DCG.L) announced Monday that it expects Group revenue in the first half of the financial year to be ahead of last year, driven by strong performances from two largest brands, Cathedral City and Clover. Further, the company sees profit for the half year to be slightly ahead of the same period last year. Our expectations for the full year remain unchanged.

In its trading update, the company said Cathedral City's revenue is expected to deliver good growth against strong volumes a year ago. Clover is expected to deliver both volume and revenue growth, continuing the positive performance from last year.

In line with the broader UK oil market, Frylight is expected to show a reduction in volume and revenue for the first half of the year due primarily to the unusually hot weather which impacted oil usage. However, trading has improved significantly in recent weeks and that trend is expected to continue into the second half.

The company has continued to restrict Country Life promotional activity while butter costs remain high, and this continues to impact sales.

The Functional Ingredients business continues to grow in line with expectations.

Further, Dairy Crest said it aims to deliver 10% of its revenues from products developed within the past three years. In 2017/18, 14% of revenues came from recent innovation.

The next few months will see several new product releases for Cathedral City. The company will shortly unveil a galacto-oligosaccharides (GOS) 'shot' for consumers which is marketed under the Promovita brand name.

Dairy Crest expects to issue its Interim Results for the six months ended September 30 on November 7.

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