Dairy Crest on Friday announced the sale of its Nine Elms depot as it revealed its full year profits were likely to be ahead of previous expectations, despite warning that its trading environment had continued to be 'challenging'.

Despite the difficulties during the third quarter, which was broadly in line with its expectations, the dairy food supplier continued to grow key brand sales and implement cost reduction projects.

Sales across its four brands grew 4% over the nine months ended December 31st, with a strong third quarter in its Frijj products.

The sale of properties during the period generated profits of around £18m, of which Nine Elms generated £15m, contributing to an anticipated overall increase in adjusted profit before tax for the full-year.

Mark Allen, Chief Executive of Dairy Crest, said: "Dairy Crest has delivered a solid performance in the third quarter, with the combined sales of our four key brands continuing to grow. Innovation continues to support the development of these brands and our new launches are performing in line with our expectations.

"We are delighted to have secured over £17m from the sale of Nine Elms. This reflects the work we have done to maximise the potential of this site over recent years.

"As a result profits this year are likely to be ahead of previous expectations, and significantly ahead of last year. Looking forward, we will continue to grow added value sales and reduce costs in line with our well-established strategy."

The sale of its residential and middle-ground milk depo, Nine Elms, reflected the steady decline in residential milk deliveries in recent years, it added.

Dairy Crest's share price jumped 1.57% to 519p early on.

NR

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