Dairy Crest has reported a 16% fall in adjusted pre-tax profits, as its dairy business continues to struggle, but a continued strong performance by its Cornwall-made Cathedral City Cheese has bolstered its bottom line.
In its interim report for the half year to September 30, pre-tax profits were down to £19.1 million. But the £47.7 million disposal of its spreads business St Hubert in August strengthened the group's balance sheet and helped slash its net debt by 79% to £75.8 million.
Dairy Crest revenues were seven per cent down overall over the six months to £739.1 million, despite a strong branded sales performance.
It said that this reflected lower milk and ingredients sales and cream realisations, with an 11% fall in its dairies business and plans to create a "smaller, more sustainable", dairies business.
Since the beginning of the financial year it has closed two dairies at Aintree in Liverpool and Fenstanton in Cambridgeshire and 23 depots.
Sales in its cheese and UK spreads businesses together increased by 3%. Cathedral City's £250 million in sales helped drive an overall 11% increase in sales of Dairy Crest's four key brands.
As had been anticipated, profits decreased slightly from £16.5 million in 2011 to £15.6 million in 2012, due to increased milk costs this year and a higher investment in advertising.
Chief executive Mark Allen said: " The decisive actions we have taken during the period leave us well placed as we move forward.
"We remain confident that full year performance will be in line with our expectations."