But profits fell from �18.5m to �16.5m because of a rise in interest payments and a number of one-off charges, including the cost of defending an Office of Fair Trading investigation.

The OFT is looking at milk supply to the middle market, which includes convenience stores and corner shops, in Scotland.

The Glasgow-based group has spent �700,000 on legal and professional fees so far but said it expected the OFT to report its findings within the next couple of months.

Its dairy in Droitwich Spa, West Midlands, which has now been open for just over a year, helped to life sales.

Turnover up

The facility is part of a planned expansion out of the group's Scottish heartland and volumes processed at the plant grew to the equivalent of more than 200 million litres annually by the year end.

Overall sales of liquid milk went up by13.4% to reach 920 million litres for the year to March 2002, helping total annualised volumes hit more than 1 billion litres for the first time.

This, acquisitions and higher milk prices meant group turnover leapt 23.6% to �371.1m.