Dairy Crest said full-year results will be in line with expectations despite market volatility, but warned of further price increases on its products.
Industry raw milk prices rose sharply in the autumn as a result of increased commodity prices, higher on-farm costs and national volume shortages.
But price increases and a strategy to focus on key brands such as Cathedral City, Utterly Butterly, Country Life Spreadable, St Hubert Omega 3 and Petits Filous helped drive growth, the company said.
Ongoing inflationary pressures will lead to further price increases in the coming months "as necessary" Dairy Crest added.
The company said it would maintain raw milk prices for farmers, despite a drop in market prices for skimmed milk powder, cream and butter.
Mark Allen, chief executive of Dairy Crest, said: "The dairy industry has experienced well-documented volatility over the past year.
"The market continues to be challenging particularly in respect of input cost inflation, but we are optimistic our business is well placed to deal with this."
Dairy Crest also expects to pay a £9.4 million fine from the Office of Fair Trading (OFT) following an investigation into price-fixing between dairy firms and supermarkets.
Preliminary results for the year ending March 31st 2008 will be announced on May 20th 2008.
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