Dairy Crest has agreed a sale of its Nine Elms milk depot for £17.6m and as a result expects full-year profits to be ahead of expectations.
The dairy giant has agreed a sale of the London site to Battersea Project Phase 5 Residential Company Limited and expects to generate a £15m profit from the deal.
It was previously used by Dairy Crest for residential milk deliveries and to service its middle-ground customers.
The deal was announced as Dairy Crest this morning reported third-quarter profits in line with its expectations.
Combined sales of its four key brands – Cathedral City, Country Life, Clover and FRijj – grew by 4% over the nine month period to 31 December 2013.
Innovation continued to support the development of the brands and Dairy Crest’s new launches were performing in line with its expectations, said CEO Mark Allen, adding that the sale of Nine Elms reflected the work it had done to maximise the potential of the site over recent years.
“As a result, profits this year [to 31 March 2014] are likely to be ahead of previous expectations, and significantly ahead of last year. Looking forward, we will continue to grow added value sales and reduce costs in line with our well-established strategy.”
Dairy Crest is set to make a £15m profit from the sale of its Nine Elms milk depot. It anticipates that profits from the sale of properties will total around £18m for the full year, £10m ahead of previous expectations.
However, it warned that “the challenging spreads market” would lead to full-year spreads profits below previous expectations.
Overall, a full-year increased adjusted profit before tax would see additional bonus payments to 1,200 Dairy Crest employees, totalling around £2.5m, it said.