Dairy Crest has blamed high milk purchase prices and weak dairy commodity markets for an 8% slump in full-year profits.

Adjusted pre-tax profits dropped from £86m to £79.5m in the year to 31 March, on sales up 5% to £1.6bn.

Dairy Crest said the dairy commodities market during the period had been “the most difficult that many in the industry have ever witnessed”.

Operating profits in its dairies division fell to £7.9m due to “difficult trading conditions” although sales rose 4% due to higher milk prices. However, its food division – up 7% to £537.3m – was boosted by strong performances from brands including Cathedral City, Clover, Country Life and St Hubert.

“Our plans for 2009-10 are to maintain our focus on cash management and to continue the development of our key brands,” said chief executive Mark Allen. “Trading at the start of the year is in line with expectations and we believe that our business is in good shape to deliver in the year ahead.”