Half year pre-tax profit at Dairy Crest Group (DC) dropped 13% to £13.1m in the six months ended 30 September 2015.
Revenue fell 5% to £203.8m.
The sale of DC’s dairies division to Muller Wiseman will complete on 26 December this year and is described by the company as transformational for the business.
“The sale of our dairies operations leaves Dairy Crest well positioned for long-term profitable and sustainable growth alongside strong cash generation,” said chief executive Mark Allen.
“We expect this to start in the second half of 2015-16 despite the continuing challenging environment.
“Following the sale of our dairies business, Dairy Crest will be a predominantly branded, simpler, more focused business with a significantly reduced overhead base.
“Future sales of ingredients for infant formula, which will start in the second half, will provide added impetus.”
The business generated more cash in the six months to the end of September, at £22.3m, compared with a £20.6m deficit in the same period last year.
Net debt had peaked, said DC, as the cash drain of the dairies business ended and future capital expenditure in its continuing businesses was expected to reduce significantly.
The business has refinanced, with a new £240m revolving credit facility.