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					   DAIRY CREST GROUP PLC

     PRELIMINARY RESULTS
For the year ended 31 March 2005




                                   1
Highlights


• Turnover (including share of joint ventures) £1.35bn (2004: £1.36bn)

• Adjusted* profit before tax £84.2m (2004: £85.1m)

• Reported profit before tax up 46% to £66.7m (2004: £45.6m)

• Adjusted earnings per share 49.3 pence (2004: 50.0 pence)

• Full year dividend up 7% to 20.2 pence

• Strong cash generation delivers £52m reduction in net debt

* profit before exceptional items and goodwill amortisation              2
 Highlights

• Encouraging progress from brand portfolio with particularly strong
  performance from Cathedral City

• Acquired 100% ownership of Country Life brand with new marketing
  campaign planned

• Own label cheese supply gains with ASDA and Morrisons

• Own label fresh milk supply gains with Morrisons and Sainsbury’s
  following loss of Tesco and ASDA

• Strategic acquisitions of Midlands Co-op Dairies and Starcross Foods
  to strengthen Dairies business

• Launch of “St. Ivel advance” innovative branded fresh milk enriched
  with Omega-3

                                                                         3
Financial Review

 Alastair Murray




                   4
Profit and Loss
  £’m                            Year       Year
                                March 05   March 04

  Operating profit               100.6      104.8
  Interest                       (16.4)     (19.7)
  Profit after interest           84.2       85.1
  Operating exceptionals          (5.4)     (24.2)
  Profit/(loss) on business /
  property disposals              1.0        (3.1)

  Goodwill                       (13.1)     (12.2)
  Profit before tax               66.7       45.6
  Taxation                       (19.0)     (10.4)
  Profit after tax                47.7       35.2

                                                      5
Earnings and Dividends


                        Year       Year      Change
  Pence per share      March 05   March 04     %

  Adjusted EPS           49.3       50.0       -1
  EPS : FRS3             38.2       28.1      + 36
  Dividends              20.2       18.9      +7
  Dividend cover         2.4x       2.6x
  Shares in issue: m    123.4      122.6




                                                      6
Operating Results
   £’m                                                Year                 Year
                                                     March 05             March 04
   Turnover
   Consumer Foods excl jv                                799                790
   Joint ventures                                         88                90
   Consumer Foods                                        887                880
   Food Services                                         462                482
   Total                                                1,349              1,362
   Operating profit *
   Consumer Foods excl jv                                64.5               66.6
   Joint ventures                                        7.5                5.6
   Consumer Foods                                        72.0               72.2
   Food Services                                         28.6               32.6
   Total                                                100.6              104.8

  * operating profit before exceptional items and goodwill amortisation              7
Operating Margin*

 %                                                Year                       Year
                                                 March 05                   March 04



 Consumer Foods excl jv                                8.1                         8.4
 Joint ventures                                        8.5                         6.2
 Consumer Foods                                        8.1                         8.2
 Food Services                                         6.2                         6.8
 Total                                                 7.5                         7.7



  * Based on operating profit before exceptional items and goodwill amortisation         8
Balance Sheet

£’m                     Year       Year
                       March 05   March 04

Net operating assets    568.9      588.4
Dividends and tax       (68.7)     (62.1)
                        500.2      526.3
Net debt                (227.5)   (279.7)
Net assets employed     272.7      246.6
Gearing                  83%       113%




                                             9
Operating Cash Flow

 £’m                                                     Year                       Year
                                                        March 05                   March 04

 Adjusted Operating profit                                100.6                    104.8
 Depreciation                                               34.4                     36.0
 Cash exceptionals                                          (1.3)                    (3.9)
 Joint ventures and other                                  (11.3)                   (10.5)
 Working capital                                            20.6                     10.2
 Operating cash flow                                       143.0                    136.6




  * Based on operating profit before exceptional items and goodwill amortisation              10
Cash Flow
 £’m                                    Year       Year
                                       March 05   March 04

 Operating cash flow                    143.0      136.6
 Capital expenditure (net of grants)    (37.7)     (41.7)
 Interest, tax and dividends            (54.2)     (49.8)
 Acquisitions                            (9.9)      (3.7)
 Disposals                               8.4        22.3
 Other                                   2.6        1.8
 Movement in net debt                    52.2       65.5
 Net debt at 31 March 2004              (279.7)
 Net debt at 31 March 2005              (227.5)


                                                             11
 Group Stocks Movement
• Significant reduction in group stocks benefits cashflow
 - strategy to reduce cheese stocks pre CAP reform
 - reduced ingredients stocks following downsizing of business in 2003
       240

       230

       220

       210

       200
  £m




                                                                H1
       190

       180                                                      FY

       170

       160

       150
             2001/02      2002/03       2003/04       2004/05

                                                                     12
Pensions Summary

• Actuarial valuation as at 31 March 2004 completed during the
  year indicated surplus under SSAP24 of £30m

• FRS 17 gross deficit at 31 March 2005 of £104.4m (2004:£95.2m)
   - better investment returns of c.£20m
   - decrease in AA corporate bond yield and inflation/salary
     increases totalling c.£20m
   - shortfall in contributions on FRS17 basis of c.£8m

• Employer contributions to increase by 3.5% (c.£3m) to 11.4%
  from 2005/06
    - no impact on P&L charge under IFRS

• Reviewing implications of new pensions legislation


                                                                   13
IFRS Current Position

• Restatement of opening balance sheet at 31 March 2004
  completed

• Restatement of profit and loss account for 2004/05 and balance
  sheet at 31 March 2005 completed

• Numbers are unaudited estimates based on current
  understanding of IFRS

• Numbers will not be audited until May 2006

• Further changes may be required if additional standards issued
  or interpretation amended


                                                                   14
    IFRS Overview

•   IFRS does not alter cash flows of the Group

•   No impact on operations – solely an accounting matter

•   Major changes are in accounting for pensions, share based payments,
    goodwill and dividends. Other minor changes

•   Adjustments are in line with expectations

•   Net assets at 31 March 2004 reduced by £56.7m and normalised PBT
    for 2004/05 by £8.9m. Change to pensions represents £70.3m and
    £7.6m of these adjustments respectively and change to dividends
    increases net assets by £16.5m

•   Net assets at 31 March 2005 reduced by £50.7m. Pensions represent
    £76.8m of this adjustment offset by change to dividends, £17.7m and
    reversal of goodwill amortisation, £10.6m (after tax)


                                                                          15
Business Operations

  Drummond Hall




                      16
Spreads


• Good progress by spreads business with increased profitability
   - biggest Dairy Crest profit centre

• Increased investment in marketing primarily media

• Portfolio approach to managing brands

• Price increases achieved from August 2004

• Clover and Utterly Butterly grew sales by 2% and 1%
   - increased share of dairy spreads sector



                                                                   17
Spreads
• Continued improvement in St Ivel Gold
   - underlying “off promotion” growth
   - new “Gold Lowest” successfully
     launched in January 2005

• Good growth in Country Life with Dairy Crest sales of packet and
  spreadable up 26% and 27% respectively
   - acquisition of 100% ownership of Country Life brand
   - new marketing campaign
     late Summer 2005
   - national TV advertising




                                                                     18
Cathedral City
• Strong performance from Cathedral City
   - both volume and value growth over 20%
   - brand now worth approximately £90m at retail value

• Increased marketing and promotional activity
    - national TV advertising campaign during year

• Successful New Product Development focused on convenience
   - Grated launched Sept 2004
   - second format of Dip&Go! launched April 2005
   - new “Lunch Pack” launched April 2005

• Davidstow creamery successfully commissioned

                                                              19
Cheese
• Improved cheese prices maintained throughout 2004/05
    - seasonally adjusted cheese stocks have fallen for 29
      consecutive months to March 2005

• Overall cheese sales up 2% by volume and 5% by value

• Asda new supply agreement for all own-label cheddar and other
  British cheeses
   - commences Summer 2005
   - manufacture at Aspatria creamery

• Morrisons new supply agreement for majority of own-label cheddar
   - additional 8,000 tonnes per annum
   - manufacture at Haverfordwest creamery

• Cost based price increases under negotiation
                                                                     20
Fresh Dairy Products
• YDC brands continue to perform well with strong growth
   - Petits Filous sales value up by 14%
   - Frubes sales value up by 11%
   - YOP sales value up by 35%
   - Wildlife sales value up by 21%
   - Weight Watchers sales value up by 14%

• New Product Development
   - Weight Watchers range continues to expand
   - Petits Filous yogurt recently launched

• YDC to focus future development on brands
   - retailer brand yogurt and desserts market challenging
   - Enfield and Yeovil to close by summer 2005

                                                             21
Retail Milk
• Overall fresh milk volumes up 5%

• Performance and volumes impacted in H2
  - loss of Asda volume from November 2004
  - higher energy and packaging costs

• Price increases achieved from March 2005 reflecting higher industry costs

• Tesco volume ceased in April 2005

• Strong customer base
  - 50% share of Sainsbury’s and Morrisons
  - 100% of Waitrose and Marks & Spencer

• Strategic acquisitions to strengthen Dairies business
  - Starcross Foods dairy in Derbyshire
  - Midlands Co-op Dairies
                                                                              22
 Starcross acquisition

• Announced acquisition of Starcross
  Foods on 5 May 2005                                       Northern
                                                            distribution limit
   - Foston, Derbyshire
   - total consideration £16.9m
   - current capacity 100ml of milk pa

• Extends geographical footprint across   Starcross
  England and Wales to cover most of
  the major northern conurbations                               Fenstanton

                                               Severnside
                                                                 Chadwell
                                                                  Heath
                          NRC Dairies
                                            Totnes


                                                                        23
Midland Co-op Dairies acquisition
• Announced acquisition on 16 May 2005
   - £20m cash consideration

• Midland Co-op Dairies is the largest regional dairy
   - sales of approximately 200ml of milk pa
   - mixture of retail, wholesale and doorstep customers
   - 4 year contract to supply Co-op stores in Midlands region

• Integration into existing Dairies business underway
    - proposed closure of Birmingham dairy and three depots
    - cash exceptional charge of c. £9m in current year

• Acquisitions of Midlands Co-op Dairies and Starcross, together
  with recent business wins, expected to benefit Group profitability
  by approximately £4m in 2006/07
                                                                       24
Other Liquid Products

• Continued improvement in organic milk
   - own brand sales value up 38%
   - Rachel’s brand sales value up 22%

• FRijj maintained market leading position

• Improved performance in potted cream with better business mix
   - increase in proportion of added value creams
   - new Waitrose Select Farm cream performing well

• New investment at Chard to create centre of excellence for
  speciality creams
   - Marks & Spencer creams to move to Chard from YDC Enfield

                                                                  25
St. Ivel advance

• New branded fresh milk enriched with Omega-3
    - whole and semi skimmed
    - 1 and 2 litre bottles

• Studies show that increased Omega-3 consumption
    - may enhance learning and concentration in some
      people
    - also helps to maintain a healthy heart
    - brand positioned to appeal to mums with young
      children

• Launched May 2005 with strong marketing support

• Initial national distribution in Waitrose and Tesco


                                                        26
Household

• Strong contribution to Group’s profit and cashflow

• Overall household volumes and turnover up year on year
   - volume gained in middle ground

• Doorstep price increase from October 2004 of 1 penny per pint

• Underlying doorstep decline now down to 8%
   - increased investment in canvassing
   - first class service initiatives

• Non-milk product sales up over 8%

• Continued infill acquisitions

                                                                  27
Ingredients



• Ingredients volumes down following closure of butter powder
  facility in July 2003

• Good performance with strong markets for commodities

• Continued uncertainty over impact of CAP reform




                                                                28
Milk Procurement



• Developed stronger working relationship with Dairy Crest Direct

• Over two thirds of raw milk sourced from Dairy Crest Direct

• DC increased average prices for its liquid milk by 0.4ppl in March
  and a further 0.35ppl in April
   - following price increases achieved with retailers

• Possible price rise for milk suppliers on cheese contracts




                                                                       29
 Outlook


• Dairies business materially strengthened
   - integration of Midland Co-op Dairies and Starcross
   - Morrisons fresh milk gain will benefit H2

• Significant brand initiatives in H1
   - new marketing campaign for Country Life
   - launch of St Ivel advance

• Group continues to be cash generative

• Trading at the start of the year in line with our expectations


                                                                   30
   DAIRY CREST GROUP PLC

     PRELIMINARY RESULTS
For the year ended 31 March 2005




                                   31

				
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