DAIRY products group Dairy Crest will tell shareholders at its London annual general meeting today that first quarter trading is on course and it is “soundly placed for the rest of the year”.

Chairman Anthony Fry will reveal that total sales of its five key brands – Cathedral City, Country Life, Clover, St Hubert Omega 3 and Frijj – have increased by 5% compared with the same quarter last year, despite an increasingly tough trading environment.

He will also confirm the launch of several new products later this year, including Chedds, a new children’s cheese snack, and new flavours for its branded milk shake Frijj.

On June 30 the group paid £13m for MH Foods which makes healthy ‘one calorie’ spray cooking oils and salad dressings which Mr Fry said will fit well with its spreads business.

The spreads division has a factory in Kirkby’s Moorgate Road which, after consolidation last year, announced 45 new jobs in May.

Dairy Crest also has a milk processing site in Aintree’s Long Lane and shareholders will hear today that, due to strong competition in retail milk markets, residential milk sales have dropped.

However, Mr Fry said the group is still confident of achieving £20m of efficiency savings this year.

Chief executive Mark Allen will tell shareholders later today: “We knew at the start of the year that we faced higher input costs in an increasingly tough environment for consumers.

“By focusing on our brands and by becoming more efficient we are dealing with those challenges and are soundly placed for the rest of the year.

“We remain committed to innovating and investing in our brands and facilities for long-term benefit.”

Today’s update met with a mixed reaction from two Liverpool stockbrokers.

Panmure Gordon stuck with its ‘sell’ call on Dairy Crest shares, while Shore Capital recommended shareholders to hold onto their stock, saying: “We believe that Dairy Crest’s stock is fairly valued”.

Shore also believes the group will outperform a falling market.