Profits from cheese helped Dairy Crest to what it called “good progress” in the six months to 30 September.

In a trading update before its interim results are published on 11 November, Dairy Crest said increased profits in its cheese division were underpinned by growth for key brands including Cathedral City, Clover, Country Life and Frijj. Sales of milk to major retailers had also increased during the period.

But it warned that the liquid milk market remained “very competitive”, with sales volumes to the middle ground being lower than last year.

Chief executive Mark Allen said input costs had increased and suggested consumer confidence remained fragile.

“In the first half our broad base, high-quality brands, strong programme of efficiency improvements and focus on cash generation have allowed us to balance these conflicting demands successfully,” Allen said.

Yesterday Morrisons announced that it was extended its supply deal with Dairy Crest until 2015. Arla Foods, which also supplies the supermarket, picked up a similar deal.

Read more
Dairy Crest and Arla bag long-term Morrisons deals (29 September 2010)
Robert Wiseman warns over fall in profits (16 September 2010)