Dairy Crest has still not peaked

Antisoma's drugs can give it new life; Business Post offers first class prospects

Investors have been milking Dairy Crest since this column advised people to buy its shares in the summer. They lapped up the food group's move away from the volatile commodity end of the dairy market and into branded products, such as posh spreads and yoghurts.

Tasty interim figures yesterday show spreads now powering most of the group's profits. Clover and Utterly Butterly led the charge, growing volumes by 15 per cent between them. The group hopes to work the same magic with the re-launch of St Ivel Gold and Vitalite, acquired a year ago.

The rest of its branded businesses, which contribute 55 per cent of group profits, are also strong. Frijj milkshakes grew by 19 per cent, while Cathedral City cheddar was up 11 per cent, with new diced and sliced formats to thank for the rise. Yoplait yoghurts added 36 per cent to their volumes. Overall, the group's interim profits before tax rose 40 per cent to £9.1m.

Meanwhile, someone seems to have been nibbling their way through the country's cheese mountain, because Dairy Crest said cheddar prices were improving from recent historic lows. Whether this means farmers can look forward to better prices for the liquid milk they supply to make cheese - a bone of major contention - remains unclear. Dairy Crest is adamant that it won't yield to their demands for an extra 2p per litre. That is clearly not good for struggling dairy farmers, but it is good news for profit margins at Dairy Crest. Drummond Hall, the chief executive, says 60 per cent of the farmers he deals with have now agreed to accept a rise of 1.4p per litre, with only the stubborn milk co-operatives holding out for more.

Although milk remains as low a margin business as ever, the merger between Express Dairies and Arla should pave the way for Dairy Crest to pick up some business from supermarkets looking to reduce their dependency on the merged company. The shares, down 2.75p to 484.25p, should have further to go.

Antisoma's drugs can give it new life

Antisoma was the first share tipped in this column in 2003, and the biotech minnow has performed for us. At 46p, it is up 55 per cent thanks to investors' renewed appetite for risky companies and its own progress with work on four novel cancer drugs.

Yesterday's quarterly figures showed the company has £31.2m in the kitty, about two years' worth of cash assuming it ramps up trials of promising early-stage drugs. Antisoma also has a rich sugar daddy in the shape of Roche, the Swiss pharmaceuticals giant, which will bankroll the final stages of human trials and the marketing of Antisoma's potential blockbuster drugs in return for 80 per cent of the takings. As a quasi-research and development arm of Roche, Antisoma is less risky than some in the biotech sector.

But risks abound and there is a "binary event" coming up in the spring. Binary in the sense that the outcome is either "1" (its ovarian cancer drug works) or "0" (it doesn't). Savvy analysts say Antisoma shares could double if the drug, R1549, is successful, halve if it is not. Given the probability of success, it is reckoned to be about 65 per cent, that looks a gamble worth taking.

And behind R1549, another couple of interesting drugs, including a pill that looks like it can kill cells in the middle of a tumour, which will soon be tested in conjunction with chemotherapy. Interesting.

Business Post offers first class prospects

Business Post, the little express delivery group, is set to break into the Royal Mail's postal monopoly as early as next April. The company plans to pick up, sort and transport mail from large companies with lots of post, but can only take them as far as a local Royal Mail office. The regulator, Postcomm, is set to rule before the end of the year on the exact figure Business Post must pay for access to the Royal Mail's "last mile" army of postmen and women. The state-owned group is likely to get up to 11.5p per letter for delivering on behalf of private companies.

Slough-based Business Post believes it can take 3 per cent of the £5.3bn annual postal market from Royal Mail. That is an extra £150m turnover, doubling the size of the business in three years. If that's not exciting enough, there are hopes that further deregulation will enable individual letter-writers to use Business Post letterboxes in supermarkets by the end of the decade.

So the future looks all right. Meanwhile, Business Post increased turnover by 23 per cent to £89.4m in the six months to 30 September, as it acquired new businesses and expanded its parcels operations from business deliveries into consumer packages. Pre-tax profits were up 13 per cent to £8m.

The fast-growing new and future ventures justify the share price of 486p, a multiple of 25 times next year's forecast earnings. One to tuck away.

Arts and Entertainment
TVShow's twee, safe facade smashed by ice cream melting scandal
News
newsVideo for No campaign was meant to get women voting
Sport
Wayne Rooney talks to the media during a press conference
sport
Arts and Entertainment
tv
PROMOTED VIDEO
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Sport
Alexis Sanchez celebrates after scoring his first goal for Arsenal in the Champions League qualifier against Besiktas
sportChilean's first goal for the club secures place in draw for Champions League group stages
News
i100
News
Down time: an employee of Google uses the slide to get to the canteen
scienceBosses are inventing surprising ways of making us work harder
Arts and Entertainment
Amis: 'The racial situation in the US is as bad as it’s been since the Civil War'
booksAuthor says he might come back across Atlantic after all
Extras
indybest
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

PMO Analyst - Risk - Banking - London - £350-£400

£350 - £400 per day: Orgtel: PMO Analyst - Risk - Banking - London - £350 - £4...

C# Developer (C#, ASP.NET Developer, SQL, MVC, WPF, Real-Time F

£40000 - £48000 per annum + benefits+bonus+package: Harrington Starr: C# Devel...

C# Swift Payment Developer (C#, ASP.NET, .NET, MVC, Authorize.N

£45000 - £60000 per annum + benefits+bonus+package: Harrington Starr: C# Swift...

DevOps Engineer - Linux, Shell, Bash, Solaris, UNIX, Salt-Stack

Negotiable: Harrington Starr: A fast growing Financial Services organisation b...

Day In a Page

Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone
Amazon is buying Twitch for £600m - but why do people want to watch others playing Xbox?

What is the appeal of Twitch?

Amazon is buying the video-game-themed online streaming site for £600m - but why do people want to watch others playing Xbox?
Tip-tapping typewriters, ripe pongs and slides in the office: Bosses are inventing surprising ways of making us work harder

How bosses are making us work harder

As it is revealed that one newspaper office pumps out the sound of typewriters to increase productivity, Gillian Orr explores the other devices designed to motivate staff
Manufacturers are struggling to keep up with the resurgence in vinyl records

Hard pressed: Resurgence in vinyl records

As the resurgence in vinyl records continues, manufacturers and their outdated machinery are struggling to keep up with the demand
Tony Jordan: 'I turned down the chance to research Charles Dickens for a TV series nine times ... then I found a kindred spirit'

A tale of two writers

Offered the chance to research Charles Dickens for a TV series, Tony Jordan turned it down. Nine times. The man behind EastEnders and Life on Mars didn’t feel right for the job. Finally, he gave in - and found an unexpected kindred spirit
Could a later start to the school day be the most useful educational reform of all?

Should pupils get a lie in?

Doctors want a later start to the school day so that pupils can sleep later. Not because teenagers are lazy, explains Simon Usborne - it's all down to their circadian rhythms
Prepare for Jewish jokes – as Jewish comedians get their own festival

Prepare for Jewish jokes...

... as Jewish comedians get their own festival
SJ Watson: 'I still can't quite believe that Before I Go to Sleep started in my head'

A dream come true for SJ Watson

Watson was working part time in the NHS when his debut novel, Before I Go to Sleep, became a bestseller. Now it's a Hollywood movie, too. Here he recalls the whirlwind journey from children’s ward to A-list film set
10 best cycling bags for commuters

10 best cycling bags for commuters

Gear up for next week’s National Cycle to Work day with one of these practical backpacks and messenger bags
Paul Scholes: Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United

Paul Scholes column

Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United
Kate Bush, Hammersmith Apollo music review: A preamble, then a coup de théâtre - and suddenly the long wait felt worth it

Kate Bush shows a voice untroubled by time

A preamble, then a coup de théâtre - and suddenly the long wait felt worth it
Robot sheepdog technology could be used to save people from burning buildings

The science of herding is cracked

Mathematical model would allow robots to be programmed to control crowds and save people from burning buildings
Tyrant: Is the world ready for a Middle Eastern 'Dallas'?

This tyrant doesn’t rule

It’s billed as a Middle Eastern ‘Dallas’, so why does Fox’s new drama have a white British star?