Express Dairies has posted a rise in first half profits as the group restructured and cut debt.

Interim pre-tax profit to September 30 rose to £14m from £13.4m last last year on turnover of £347m down from £401m in 2001 due to disposals .

Net debt has fallen by £74.2m to £121.2m following the disposal of non-core businesses.

Chief executive Neil Davidson said the company had maintained its market share in the supply of milk to supermarkets.

However, chairman Sir David Naish cautioned that “returns in this sector continue to reflect industry overcapacity, which will ultimately be addressed only through consolidation and rationalisation".

Express said that job losses had “inevitably” arisen due to restructuring, with the number of its employees falling to 5,217 from 6,976 in September 2001.

In the home delivery sector, it claimed to have further reduced costs while developing its plans to maximise the potential of its network after obtaining Postcomm licence.

The group said it is on track to achieve targeted cost savings of some £9m this year and expects capital spending to reach £20m for the current year.