Cathedral City cheese guards Dairy Crest against cream price rises

Helen Cahill
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Cream prices have been hitting Dairy Crest's margins (Source: Getty)

Cathedral City cheese has helped boost sales at Dairy Crest as the company navigates prices rises.

In a trading update for the six months ending 30 September, Dairy Crest said its sales volumes for its key brands, including Cathedral City cheese and Clover spread, were "well ahead" of last year.

Read more: Cream price rises churn Dairy Crest margins but cheese stops nightmares

In July, Dairy Crest warned that "substantially" higher cream prices would eat into the margins of its butter business.

But Cathedral City is expected to deliver double-digit growth for the first half, which the company said will help mitigate cost rises.

The dairy company said it had to reduce its promotional activity on Country Life butter, however.

"Dairy Crest is well positioned for long-term sustainable profit growth with an attractive combination of leading and valuable UK consumer brands," Shore Capital analysts said.

Mark Allen, chief executive of Dairy Crest, 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."

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