On Thursday, Dairy Crest posted pre-tax profits of £19.1 million for six months to October, a 19% rise.

The processor said rises were due to its cheese and butter brands performing well. However - although Chief Executive Mark Allen said a restructuring of the processor’s business is paying off - Dairy Crest still has significant debts, and the strong performance this year represents a turn-around from further losses this time last year.  

Dairy Crest sold off its dairies in an £80m deal with dairy giant Muller, which was completed in December 2015. Sales actually decreased from this time last year (falling by 7%) but profits grew due to the “leaner” Dairy Crest model.

Commenting on the publication of the interim results, Mark Allen said, “We are pleased to have delivered a strong set of interim results in our first full trading period since the sale of Dairies. Our four key brands are continuing to perform well in a challenging marketplace, with strong volume growth for Clover, Country Life and Frylight and a successful launch of new branding and packaging for Cathedral City.

“We are also seeing the benefits of Dairy Crest’s transformation into a leaner and more focused organisation, with strong profit growth and significantly improved cash generation during the first half. Our expectations for the full year remain unchanged.”

According to Defra data, the UK’s average farmgate milk price rose by 5.2 percent to 22.58 pence per litre from August to September, but the NFU and other farm groups have been highly critical of milk buyers since the reversal of fortunes in the dairy industry in the spring. Farmers’ organisations maintain that, though they were quick to feel the effects of the dairy crisis, dairy farmers have been slow to receive the benefits of reduced supplies and higher prices for dairy products. The NFU has said that processors are failing to pass on millions of pounds to farmers who have struggled through multi-year price cuts.