(MENAFN- ProactiveInvestors) Tough trading at its milk processing business held back () in its latest quarter.
The Cathedral City cheese and spreads group is waiting for regulators to give the nod to the £80mlm disposal of its dairy arm to rival Muller Wiseman but until it gets the green light has to tackle a chaotic UK milk market.
Wholesale prices in the UK have fallen to their lowest level since 2007 due to a glut of supply that has left milk cheaper than some brands of bottled water.
Supermarkets meanwhile have been accused of profiteering as farmers produce at a loss.
said while its performance will improve over the first half the lower selling prices have taken a toll.
Broker Canaccord raised its loss forecast for the dairy division to this year to £14mln though this will be offset by one-off property gains of £18.2mln.
recently cut the price it pays farmers to 23.1p per litre for liquid milk to reflect the lower commodity prices.
Elsewhere Cathedral City sold well but costs affected profits while spreads benefited from lower cream prices.
Shares edged up to 500p on the update but Canaccord said investor sentiment will be sharply changed once the dairies disposal goes through.
“The yield of 4.8% is highly attractive given the level of cover and improved balance sheet and cash generation” it added.
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