ADAS achieved a 30% improvement in productivity and a 28% reduction in trading loss during 1994/95. Turnover fell slightly to £75.7m.
Revenue from consultancy work for MAFF and the Welsh Office dropped by £200,000 to £32.1m, while public funded research fell by £70,000 to £18.3m.
The organisations commercial research and development activities went into profit for the first time. With £5.9m revenue, a cost recovery of 104% was achieved compared with 84% the previous year.
Commercial consultancy became the second biggest income stream, generating £19.4m and achieving a 65% cost recovery.
ADAS operations director Phillip Needham said he was confident the organisation could pass this years MAFF cost recovery target of 73%, and was on target for 100% by 1996/97.
"The arable sector accounted for more than £4m of commercial revenue last year, with a high level of repeat business forecast. Dairying accounted for £3.3m and we expect a 30% growth in our dairy business this year," he said. "Horticultural consultancy produced over £2m of commercial revenue and we are broadening our range of services to this sector."
Asked whether privatisation would increase consultancy charges, ADAS chairman Charles Bystram said: "Consultancy costs will always be an investment. If that investment becomes a little more expensive, we will have to ensure farmers get higher returns."
• Mr Needham became acting chief executive of ADAS this week, replacing Julia Walsh who leaves at the end of the month.