CONTEMPORARY CORPORATE REPORTING

Contemporary Corporate Reporting



Contemporary Corporate Reporting

Part 1

Introduction

Dairy Crest Group plc, a dairy foods company, engages in the manufacture and trading of milk and dairy products in the United Kingdom, Ireland, and internationally. The company operates in two divisions, Foods and Dairies. (Wood 2001 691-718) (Gioia, 2004,, 363).

The Foods segment comprises predominantly branded cheese and spreads sold through the multiples. It includes the U.K. Spreads, the St Hubert, and French and Italian spreads business. It manufactures and sells cheese, butter, and spreads in the United Kingdom and Europe. The company's spreads business makes butter and dairy spreads from cream skimmed from the milk used by its Dairies division. Its primary brand includes Cathedral City. The Dairies segment comprises predominantly liquid milk sales through the multiples, middle ground or doorstep. The Household business is included within the Dairies segment as its operations are mutually interdependent with the liquid milk business. It processes and delivers fresh conventional, organic and flavoured milk to major retailers, 'middle ground' customers ranging from coffee shops to hospitals and on the doorstep. It manufactures and sells FRijj, the fresh flavoured milk brand, cream, and milk powders. It also produces a range of potted cream for consumers (Gioia, 2004,, 363).

Financial Highlights (In GBP as of 2009/10/11)

Total Revenue

2,603,600,000

EBITDA

(403,900,000)

Operating Income

(40,500,000)

Net Income

(443,800,000)

Total Assets

4,095,400,000

Current Assets

762,000,000

Total liabilities

3,103,600,000

Current Liabilities

1,071,900,000

Long Term Debt

1,632,600,000

Stockholders' Equity

991,800,000

Ratio Analysis

Profitability Ratios

2009/10

2010/11

 

 

 

ROA % (Net)

-10.81

-2.29

ROE % (Net)

-36.1

-6.59

ROI % (Operating)

-1.37

3.61

EBITDA Margin %

-15.51

-3.27

Calculated Tax Rate %

EBT<0

EBT<0

 

 

 

Liquidity Indicators

2009/10

2010/11

 

 

 

Quick Ratio

0.33

0.47

Current Ratio

0.71

0.8

Net Current Assets % TA

-7.57

-3.77

 

 

 

Debt Management

2009/10

2010/11

 

 

 

LT Debt to Equity

1.65

1.05

Total Debt to Equity

1.82

1.12

Interest Coverage

-

9.94

 

 

 

Asset Management

2009/10

2010/11

 

 

 

Total Asset Turnover

0.63

0.81

Receivables Turnover

8.03

8.99

Inventory Turnover

11.63

13.68

Property Plant & Equip Turnover

4.17

5.21

Cash & Equivalents Turnover

80.51

141.8

 

 

 

Per Share

2009/10

2010/11

 

 

 

Cash Flow per Share

0.1

0.35

Book Value per Share

1.17

1.73

The above table indicate that the profitability position of Dairy Crest is very weak. The company is suffering from its bad days as all the profitability ratios are negative which means that the company is suffering losses and is likely to suffer the same in near future. It is also seen that the profitability condition of Dairy Crest is worst in 2009/10 as compared to 2010/11. (Weaver and Cochran 2009 539-552) (Johnson-Cramer, 2003,, 145).

Liquidity position of Dairy Crest is also very weak. According to the rule, liquidity ratios of less than 2 are dangerous because it means that the company is short of resources. This means that Dairy Crest is unable to pay-off its short term debts (Johnson-Cramer, 2003,, 145).

     It is rather apparent that Dairy Crest is strong to trounce if one is looking for steady profits development, very good fundamentals and convincing valuations. It is an very good proxy to the financial development in United Kingdom.

Dairy Crest is exclusive as a untainted retailing and circulation business with nearly no alike gazes in the country. All other businesses in the district have some pattern of integration (Downstream and upstream), which adds to their profits instability due to fluctuating prices. The frosting on the baked cake is that Dairy Crest is a UK bull - household charges increase with Currency flaw and repaired margins double-check higher ...