Seriously Strong maker Lactalis McLelland has reported a 7% fall in operating profits as a result of higher milk prices and losses at its Caledonian Cheese Company arm.

Although pre-tax profits were up 5.7% to £3.1m and turnover up 6.1% to £181.9m, operating profits fell £413,000 to £5.5m in the year to 31 December 2010.

The group had been hit by higher prices for raw milk as well as the Caledonian Cheese Company losses, the company said. The 2010 accounts also reflected costs incurred in centralising the group’s non-manufacturing activities at its new location in Surrey, the directors said.

Over the course of the year, Lactalis had continued to invest in its facilities, they added. “We also increased investment in our brands to ensure we retained our market position in the face of high levels of promotion by our ­competitors.”