Losses from the now sold Dairies division (liquid), and a loss on the sale of that division to Muller were largely responsible for Dairy Crest generating a loss for the year ended 31 March 2016.
The Dairies division was sold on 26 December 2015, but had made a loss of £33m by that point.
Dairy Crest also suffered a further £111m loss (after tax reclaimed) on the sale itself.
Continuing activities (cheese and spreads) did generate a profit for the year of £39m. Revenues declined on cheese and spreads, although this was attributed to price deflation.
Sales volume growth for the processor’s key brands increased by almost 2% which was not sufficient to offset declines in prices, although product group profit margins increased during the year.
Losses from the liquid milk business prior to its sale, deal costs and the investment at Davidstow in the manufacturing of infant formula-related products, resulted in net debt increasing by £30m. However, these costs will not be incurred in the future.
Cash generated from continuing operations saw a significant increase, demonstrating a stronger position as the business focuses on achieving growth from branded and value added products.
