http://www.investegate.co.uk/Article.aspx?id=201009300700075...

Dairy Crest has continued to make good progress in the first six months of the year. Trading in the first half of the year has been in line with our expectations and ahead of the same period last year. As anticipated, increased profits in our cheese business have underpinned this growth.

MILK

The liquid milk market is currently very competitive. In this environment we are pleased that we have negotiated a new long-term fresh milk supply contract with Morrisons. Earlier this year we announced that we had secured a new contract with Sainsbury's and this commences early in October 2010.

The drop in SP last week following the Wiseman announcement does not appear to be justified on the basis of this Trading Statement and in fact it has reversed sharply this week (did someone say something!!?).

CHEESE AND SPREADS
Our five key brands (Cathedral City, Clover, Country Life, St Hubert Omega 3 and Frijj) have grown sales in the first half compared to the same period last year despite being up against tough comparatives. We continue to promote these brands strongly. We have been particularly pleased by the continued increase in sales of our lighter (reduced fat) brand variants. In addition strong growth in Cathedral City sales has been underpinned by good growth in sales of Extra Mature and Mild variants in line with our plans.

The Trading statement is very full. I am hoping for an increased dividend given the very positive Director speak: Mark Allen, Chief Executive, commented: 'This has been another good performance from the business. We are operating in extremely competitive markets. Input costs have increased and consumer confidence remains fragile. In the first half our broad base, high quality brands, strong programme of efficiency improvements and focus on cash generation have allowed us to balance these conflicting demands successfully. We are confident that we can deliver profits this year in line with our expectations.'

Interim Results will be announced on 11 November 2010.

Regards
YoungBrummie
(I continue to hold)