Robert Wiseman Dairies has reported a 41.4% increase in half-year pre-tax profit to 30 September of £17.1m on sales up 3.8% at £291.9m.

It has also secured a deal with Tesco to source and supply 60% of the retailer's organic milk starting later this month.

Sales volumes increased 3.1% during the period and contract positions with major supermarkets were more stable, it said.

Supply agreements had recently been renewed with Sainsbury's and Somerfield and a new contract with One Stop, which started in June, had performed in line with expectations.

“Following a difficult period which included major supermarket contract changes, the group has demonstrated that margins are slowly recovering and that we are heading in the right direction,” said Robert Wiseman, chief executive of Robert Wiseman Dairies.

“The development of our new dairy, a significant increase in our share of the organics market and good relationships with our customers, leaves us in a confident mood about our future prospects.”