Top story

Diary Crest (DCG) has issued an interim management statement for the nine months to 31 December, telling the market that it is on course to meet City expectations and its cheese and spreads brands are “performing well”.

All four of its key cheese and spreads brands increased or maintained value share in the third quarter, the company said. Combined sales of Cathedral City, Country Life, Clover and Frylight over the nine month period have remained broadly in line with the same period last year and volumes have increased by 2%.

In the third quarter, Cathedral City and Frylight have built on the strong performances seen in the first half of the year. Clover Simple, which has no artificial ingredients, launched in September 2015 and Clover volumes have since grown year on year. Country Life sales volumes have “increased markedly” in the third quarter, benefitting from promotional activity.

On 26 December 2015 Dairy Crest successfully completed the sale of its dairies operations to Müller UK & Ireland, which Dairy Crest said was a “transformative moment for Dairy Crest and the wider dairy sector”.

Chief executive Mark Allen said: “”Dairy Crest is now a branded and added-value business well placed to achieve profitable and sustainable growth.

“The strength of our brands is demonstrated by their performance in a challenging, deflationary consumer environment. We are also entering an exciting new chapter for Dairy Crest. Our functional ingredients business will be a key part of Dairy Crest in the future, giving us access to new growth markets.”

Dairy Crest also announced the appointment of Peel Hunt and Shore Capital as the company’s two joint brokers.

Morning update

A busy morning has seen updates from Imperial Brands (formerly Imperial Tobacco), Tate & Lyle and Pernod Ricard.

Imperial said its first quarter performance in line with guidance and on track to meet full year outlook, with tobacco net revenues up 16.6% in the three months to 31 December. Strong pricing has resulted in organic net revenue growth of 2% despite a 9.1% fall in organic volumes. Its recently acquired ITG Brands in the USA are “performing to plan”. Growth brands have outperformed with market with volumes up 7.3%, net revenue up 10.6% (ex Iraq & Syria), and market share up 100 bps.

Alison Cooper, chief executive, commented: “We continued to make good progress against our strategic objectives in the first quarter and are well placed to meet full year expectations. We are further sharpening our focus on quality revenue growth and have advanced the simplification of our portfolio and prioritisation of profitable volume. In the USA, the ITG Brands team has made excellent progress in the quarter successfully executing our retailer and wholesale programmes and establishing the foundations for a year of strong delivery.”

Tate & Lyle has updated the market on the three months to 31 December, saying it remains he on track to deliver full year guidance with an unchanged outlook. Speciality Food Ingredients performed “steadily” with volume ahead of the comparative period. Strong volume growth in Europe and Asia Pacific more than offset softer demand in North America and Latin America. In Bulk Ingredients, North American sweetener volume in the quarter was slightly ahead of the comparative period. However Tate & Lyle said commodities “continue to have a material adverse impact on performance especially due to further weakness in the US ethanol market”. As a result, we now expect a small loss from commodities for the full year.

Pernod Ricard has instigated a number of organisational changes and a raft of job changes in its senior team effective from 1 July 2016. Firstly it is to simplify its Americas region to concentrate on its core business: the United States and Canada. Secondly, it will create two new management teams based around the lead countries of Mexico and Brazil in South America, reporting to Pernod Ricard EMEA. Thirdly, it has created the role of CEO, Global Travel Retail, which will be taken by Mohit Lal, currently MD of travel retail Asia. Job moves include Paul Duffy, currently chairman & CEO of The Absolut Company who will become CEO of Pernod Ricard North America, and is replaced at Absolut by Anna Malmhake, currently CEO of Irish Distillers.

The FTSE has plunged yet again this morning, falling 2.6% to 5,524.2pts after poor trading overnight in Asai.

Associated British Foods (ABF) is down 2.4% to 2,969p and Marks & Spencer (MKS), has fallen 2% to 403.8p in early trading.

Tate & Lyle has plunged 6.5% to 543.5p after its trading update this morning, while Dairy Crest is 2.4% at 590p and Imperial Brands is flat at 3,519.5p.

Yesterday in the City

There was some respite in the City yesterday as the FTSE 100 clawed back 0.7% 5,668.5pts, rebounding from its lowest closing number since 2012.

The recovery was driven by an improvement in banking stocks, which had been driver lower by mounting concerns over the financial health of investment bank giant Deutsche Bank.

Most grocery stocks saw improvements, including Ocado (OCDO), which leapt 7.5% back to 250p and Tesco (TSCO) which was up 4.5% to 181.5p. Also on the rise were Premier Foods (PFD), up 4.8% to 33p and Poundland (PLND), up 5.5% to 156.5p.

Greene King, which announced yesterday combined retail sales were up 67% after 40 weeks to 7 February, was up 2.9% to 858.3p.

The day’s fallers in the UK included Applegreen, down 4.1% to 340p, and Paypoint, down 3.3% to 738.5p.

Internationally, Carlsberg was up 4% to DKK569.50 after increasing full-year sales by 1% to DKK65.4bn (£6.8bn) on the back of strong growth in Asia.

However, Heineken was down 3.1% to €72.87 after increasing organic revenues by 3.5% to €20.5bn (£15.9bn).

Topics