Milk Link has reported solid half-year results on the back of a number of new contract wins this year.

Turnover at the farmer-owned co-op was up 18% to £278m, while pre-tax profit rose 24% to £9.3m. Group EBITDA rose 14% to £17.5m.

The company had boosted its income and long-term earning potential this year by winning a range of new own-label contracts with Sainsbury's, M&S, Tesco, Waitrose, Morrisons and the Co-op, chief executive Neil Kennedy said.

Milk Link also announced this week it had secured a long-term contract to supply most of Waitrose's own-label Cheddar from October 2009. The company will supply all the supermarket's own brand mild, medium, mature and extra mature Cheddar, with production due to start at Taw Valley in the coming weeks.

It will also be packing all Waitrose's third-party farmhouse Cheddars and territorial cheeses at Oswestry.

Yet despite the optimism, Milk Link echoed the views of rivals Dairy Crest and Robert Wiseman, who predicted an increasingly challenging market in their results last week. Weaker consumer demand, lower and more volatile dairy commodity prices and the growing threat of cheaper imports at the value end of the market were a worry, the company said. Nevertheless it expected demand for British-produced dairy to grow in the medium term.

Milk Link made a £4m processing interest payment to members in May, and expected to at least match that again when the next payment was due, said Kennedy. "Milk Link performed satisfactorily in the first half of the current financial year and we are well positioned to cope with the growing economic challenges and instability facing dairy," he added.

One of the only negatives in Milk Link's results came with the announcement that group borrowings were up £5.3m year-on-year to £92.7m as a result of increased stock funding required following milk price increases and greater demand for mature cheese.