Dairy Crest's warns of price rises as profits grow

Dairy Crest warned that prices will jump as it posted a 5% rise in annual profits.

The group, which makes Cathedral City cheese, Clover spread and Country Life butter, said higher costs and a poor spring for UK milk production will put pressure on prices.

Dairy Crest reported profits of £83.5 million for the year to March 31, up from £79.5 million a year earlier.

Sales of the firm's main brands, which also include Frijj milkshakes and St Hubert Omega 3 and Clover spreads, were up 9%.

Dairy Crest said it had introduced initiatives which would generate cost savings of £20 million a year, ranging from appointing a new media-buying agency to redesigning its spread tubs to driving efficiencies in its dairies and distribution depots.

The company is paying a final dividend of 13.6p, up 5%.