Wiseman is building a new dairy

In the past two years, it lost contracts to supply Asda and Morrisons.

The firm's five dairies sold 1.38 billion litres of liquid milk in the past financial year.

Revenues increased in the earlier part of the year as the price paid for milk increased, offsetting simultaneous increases in energy costs.

As energy prices increased, this made haulage costs and packaging costs more expensive.

Revenue grew by 16.2% to �568.6m in the past financial year.

Wiseman's is concentrating on supplying directly to supermarkets, where a growing number of people buy their milk, a strategy adopted by other dairy groups.

It still supplies milk to Tesco and Sainsbury's.

Earlier in May, the company was given permission for a new dairy in Bridgwater, Somerset.

The firm said the new dairy will see its first phase of completion in Autumn 2007.

Capacity is projected to be 200 million litres annually.