SEX PISTOL CAUSES SHARES TO CRASH???
Dairy Crest is one to avoid as its profit growth stalls
Seeing John Lydon, formerly Johnny Rotten in the Sex Pistols, the popular beat combo, fronting a £5 million television advertisement for Country Life butter may be hard to stomach, but the stock market found a profit warning from the butter’s heavily indebted producer even worse. Shares in Dairy Crest fell by more than a quarter yesterday as the mid-cap food producer said that full-year earnings would miss forecasts.
Like its rival Robert Wiseman Dairies, which last week said much the same, the company is being squeezed by falling ingredients prices. Dairy Crest converts surplus liquid milk into skimmed milk powder, which it sells commercially, but with the price of that powder having fallen 25 per cent over the past three months – in line with a retreat in other commodity foodstuffs – last year’s returns will be hard to match.
Maybe Johnny should have stayed on the marg!