Dairy Crest's annual results to March 31 have showed a 1% increase in revenues of £1.391bn and pre-tax profits of £64.6m, compared with £45.8m the previous year, before exceptional costs of £10.4m, against £56.5m in 2013.
These costs reflect the restructuring expenses in creating a streamlined Dairy Crest after the sale last year of its St Hubert business.
The restructuring also includes consolidating its spreads division from two factories into one location, in Kirkby where it employs about 150 staff, which is almost complete.
The reorganisation has helped deliver cost savings of £25m and the group expects to make a further £20m in savings in the current financial year.
Dairy Crest’s cheese segment became more profitable than its spreads business in 2012/13 and this differential has increased in the latest financial year.
Of its four key brands, Cathedral City cheese experienced the largest growth in sales over the year, with volumes reported to be up by 9% and value up by 12%. This grew its share of the retail cheese market to 11%, up from 10% from last year.
Strong returns from whey are reported to have supported profits of this product group over the year and Dairy Crest expect this to be further enhanced by over £5million from 2015/16, once it begins production of demineralised whey powder in mid-2015.
Commenting on the results, Mark Allen, Chief Executive, Dairy Crest Group plc said, 'The year ended 31 March 2014 was one of consolidation for Dairy Crest. Following the transformational sale of our French spreads business last year we have completed our reorganisation into one business structure. This has helped in our constant drive to reduce costs. Our largest brand, Cathedral City continues to grow strongly.
'The current trading environment is challenging. However, the strength of our key brands and our proven ability to cut costs and drive efficiencies mean that we remain confident that we can generate profit growth in all three of our product groups over the medium term. Additional profit growth will come from our project to add value to the whey stream at Davidstow, which is on track.
'Taking account of today’s challenging environment, we anticipate that trading in the current financial year will be in line with our expectations.”