Dairy giant Arla Foods hailed “strong” sales growth in the first half of 2019, but warned the impact of a hard Brexit could hit performance in the second half.

The dairy co-operative reported a group-wide 2% rise in sales for the first half of the year to €5.2bn (£4.7bn), driven by a strong performance of its branded portfolio.

Its UK division, which represents its largest market, enjoyed a “stable” start to 2019 with sales rising 3% to £987m in the first half despite “volatility in the global dairy market”.

It now expects full-year sales for 2019 to be around €10.2bn to €10.6bn. However, Arla warned of the “potential adverse consequences of Brexit”.

“Given the continued uncertainty around the adverse outcomes of Brexit, as well as the global market economy being increasingly challenged by trade conflicts, we believe our performance in the second half of 2019 could be negatively impacted by external factors,” it stated.

Efficiencies driven by its Calcium cost saving programme contributed to a healthy net profit level of 2.3% revenues, ahead of the previous two years’ net profit levels.

“The first half of 2019 saw a rare stability in the otherwise volatile global dairy market,” the company said.

“Arla delivered strong results in the first half of 2019 and the second half of the year will focus on delivering on full year targets while continuing to outperform our peers.”