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.

Start your day with The Independent, sign up for daily news emails
News
Young Winstone: His ‘tough-guy’ image is a misconception
people
Sport
Adnan Januzaj and Gareth Bale
footballManchester United set to loan out Januzaj to make room for Bale - if a move for the Welshman firms up
Arts and Entertainment
Ellie Levenson’s The Election book demystifies politics for children
bookNew children's book primes the next generation for politics
News
Outspoken: Alexander Fury, John Rentoul, Ellen E Jones and Katy Guest
newsFrom the Scottish referendum to the Ice Bucket Challenge, our writers voice their opinions
PROMOTED VIDEO
News
i100
Sport
Yaya Sanogo, Mats Hummels, Troy Deeney and Adnan Januzaj
footballMost Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
News
Nigel Farage celebrates with a pint after early local election results in the Hoy and Helmet pub in South Benfleet in Essex
peopleHe has shaped British politics 'for good or ill'
Arts and Entertainment
Pharrell Williams' “Happy” was the most searched-for song lyric of 2014
musicThe power of song never greater, according to our internet searches
Sport
Tim Sherwood raises his hand after the 1-0 victory over Stoke
footballFormer Tottenham boss leads list of candidates to replace Neil Warnock
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Voices
Strictly Come Dancing was watched by 6.9m viewers
voicesIt has been hard to form generally accepted cultural standards since the middle of the 19th century – and the disintegration is only going to accelerate, says DJ Taylor
Arts and Entertainment
Roffey says: 'All of us carry shame and taboo around about our sexuality. But I was determined not to let shame stop me writing my memoir.'
books
News
Danielle George is both science professor and presenter
people
News
i100
News
Caplan says of Jacobs: 'She is a very collaborative director, and gives actors a lot of freedom. She makes things happen.'
people
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

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?
Finally, a diet that works: Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced

Finally, a diet that works

Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced
Say it with... lyrics: The power of song was never greater, according to our internet searches

Say it with... lyrics

The power of song was never greater, according to our internet searches
Professor Danielle George: On a mission to bring back the art of 'thinkering'

The joys of 'thinkering'

Professor Danielle George on why we have to nurture tomorrow's scientists today
Monique Roffey: The author on father figures, the nation's narcissism and New Year reflections

Monique Roffey interview

The author on father figures, the nation's narcissism and New Year reflections
Introducing my anti-heroes of 2014

Introducing my anti-heroes of 2014

Their outrageousness and originality makes the world a bit more interesting, says Ellen E Jones
DJ Taylor: Good taste? It's all a matter of timing...

Good taste? It's all a matter of timing...

It has been hard to form generally accepted cultural standards since the middle of the 19th century – and the disintegration is only going to accelerate, says DJ Taylor
Olivia Jacobs & Ben Caplan: 'Ben thought the play was called 'Christian Love'. It was 'Christie in Love' - about a necrophiliac serial killer'

How we met

Olivia Jacobs and Ben Caplan
Bill Granger recipes: Our chef's breakfasts will revitalise you in time for the New Year

Bill Granger's healthy breakfasts

Our chef's healthy recipes are perfect if you've overindulged during the festive season
Transfer guide: From Arsenal to West Ham - what does your club need in the January transfer window?

Who does your club need in the transfer window?

Most Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
The Last Word: From aliens at FA to yak’s milk in the Tour, here’s to 2015

Michael Calvin's Last Word

From aliens at FA to yak’s milk in the Tour, here’s to 2015