Milk buyer and processor Dairy Crest has reported lower profit and revenues from its latest full year’s trading, the first period since it divested its liquid milk business to Muller in December 2015. The company now concentrates on the manufacture of butter, cheese and dairy ingredients.

The company made a pre-tax profit of £40.3 million on revenues of £416.6m in the year ended March 31st 2017, compared to £45.4m and £422.3m in the previous year.

 “In the first full year since the transformational sale of our Dairies business, we have delivered a robust performance in a tough market,” says Dairy Crest chief executive Mark Allen. “The ongoing investment that we are putting behind our brands – Cathedral City cheese, Country Life and Clover spreads and Frylight cooking oil – gives me confidence that we can grow market share.

“Last year we purchased around 500 million litres of UK milk. The past year has seen a turning point in dairy prices. After a prolonged period of deflation, dairy commodity prices have experienced strong gains. Low milk prices had an effect on milk volumes. They were down in most large milk producing countries across the world. Consequently milk prices rose. During the course of the year we have increased the price we pay farmers for milk by 38% to 30 pence per litre. Since then we have announced a 1ppl reduction from June and a further 1ppl reduction from July.

“We have continued to make good progress in our demineralised whey operations at Davidstow, and are now hitting our targeted level of infant formula grade. Developing sales of demineralised whey and galacto-oligosaccharide (GOS) into the high-margin global infant formula market will be a key priority this year. At the same time we will continue our research into other potential animal and human applications for GOS.