Dairy Crest expects to record double-digit sales growth for Cathedral City

The positive news comes after Dairy Crest warned in July that the rising price of cream would cut into its margins

Dairy Crest said it expected overall profits for the six months to be ahead of last year (Getty Images/iStockphoto)

Cathedral City cheese boosted sales at Dairy Crest, helping to soften the blow of “substantially” higher cream prices.

The company said in its latest trading update for the six months to 30 September that sales for its key brands including Clover and Cathedral City were “well ahead” of last year.

Dairy Crest said it expected overall profits for the six months to be ahead of last year.

Dairy Crest predicted that its flagship Cheddar cheese brand would deliver double-digit growth during the half-year. The positive news comes after Dairy Crest warned in July that the rising price of cream would cut into its margins.

Cream is a key input into butter, one of Dairy Crest’s biggest sectors. The dairy company said it had decided to reduce its promotional activity on Country Life butter, which had reduced sales volumes but helped to mitigate narrower margins caused by the higher input cost.

Chief executive, Mark Allen said: “Cathedral City has had a strong first half of the year, delivering good volume and value growth and strengthening its position as the nation’s favourite cheese. This performance has more than offset the impact of further input cost inflation in the butter business.

“Overall, first half profits are expected to be ahead of last year. Our profit expectations for the full year are unchanged despite input costs remaining high.”

The average farm-gate cost of milk rose 34 per cent year on year in July, according to data from the Department for Environment, Food and Rural Affairs.