Consumer foods lead Dalgety's advance

DALGETY, the company that makes pet food and Pot Noodle snacks, has shaken off recession to report a 5 per cent increase in pre- tax profits.

The solid set of annual results are the first for three years that do not bear the scars of Dalgety's restructuring programme, which saw the company concentrate operation in food-related European businesses.

Taxable profits for the year to 30 June were pounds 117m, up from pounds 111m. Dalgety's consumer foods division - which incorporates Golden Wonder, Spillers' pet food and Homepride flour - provided much of the impetus, improving trading profits by 20 per cent.

Maurice Warren, chief executive, said the strength of the brands, coupled with increased promotional expenditure and some production efficiencies, was behind the profits increase.

However, the acquisition of Sooner Snacks, a Northern crisp maker, was responsible for a quarter of the rise. Dalgety said that the Sooner purchase lifted its share of the bag snacks market to 20 per cent.

Mr Warren said: 'Given the recessionary climate in which we have been operating our businesses, particularly those involved in consumer foods, achieved very satisfactory results.'

He added that the trading environment was tough and he could not foresee an immediate upturn.

Profits from Dalgety's food ingredients business fell because the company suffered from falling demand for bread flour. Mr Warren said the company had received approaches to buy the businesses but none at acceptable prices.

Earnings per share, helped by a lower tax charge, increased 6 per cent to 38.6p (36.4p) and the dividend is lifted to 19.5p (18.5p). The shares, helped by the rising market as a whole, rose 10p to 395p.