AROUND 27,000 dairy farmers are to receive shares in Dairy Crest worth around £130 million when Britain's third largest milk producer reaches the stock market this summer. Dairy farmers will have the option of taking cash instead of Dairy Crest shares in the £200 million flotation arranged by merchant bank Schroders.
It is assumed most farmers will want to be shareholders in a growing dairy combine.
The company is being floated on the back of 1995-96 financial figures, showing a 19 per cent growth in profits to £33.6 million sterling on turnover up 6 per cent at £704 million before including first time contributions from acquired activities.
Even so, investor enthusiasm may well be low key. With shares in dairy companies still suffering from the adverse impact of the BSE crisis, Dairy Crest will be joining a sector that many investors are anxious to avoid.
The quality of Dairy Crest's earnings may leave something to be desired, too. Nearly half its annual profits are earned on food services taking in butter and skimmed milk powder exposed to over supply and falling prices.
