Dairy Crest warns investors over £4m hit as Quadra calls in administrators
DAIRY Crest said yesterday it had made a £4m provision for bad debt after one of its customers, Quadra Foods, appointed administrators.
The group said it was in a strong position to absorb the debt and its dividend would not be adversely affected.
In a statement the foods group Dairy Crest said: “This is the total debt owed to us by Quadra, although we are looking at several options to reduce the amount involved.
“Dairy Crest has annual sales of £1.6bn and this is an isolated incident. It will have no material effect on our year end borrowings.”
Dairy Crest said the £4m owed will be accounted for as an exceptional item.
Quadra is best known for its Dairystix liquid milk pouches.
In an interim management statement earlier this month, Dairy Crest said group sales had risen two per cent, thanks to new products but admitted that trading was tough in the dairy products business.
Its main brands are Cathedral City, Country Life, St Hubert Omega 3, Clover and Frijj.
The group said it was is on track to meet its promised annual cost savings of £20m.
Analyst Charles Hall at Peel Hunt said: “The loss will obviously be seen as negative to sentiment in the short term, but should have minimal effect long term.”