THE dairy group behind the Seriously Strong and Galloway cheese brands has returned to profit one year after posting a 16.4 million pre-tax loss.

In the 2016 calendar year Lactallis McClelland saw sales fall 7.5 per cent to £173m, but recovered pre-tax profits to £5.6m.

Losses of £4m were recorded in 2014 as the company faced intensive competition in the market.

The Stranraer-headquartered group, which is owned by French conglomerate BSA, said the trading environment last year had remained challenging and highly competitive.

Writing in accounts newly filed at Companies House, group managing director Mark Taylor said milk price fluctuations had led to falling values of stocks and consequential reductions in the market price for cheddar. He noted that matured products would have been manufactured at higher milk prices than those prevailing at the time of sale.

He said the key challenge for the business was how to transfer the higher input costs to the market.

“The business continued to support the Seriously Strong, and other key cheddar brands with advertising and promotional investments,” he wrote. “Our main continental brands, President and Galbani, performed well, delivering category growth in the year. Rachel’s Organic also performed well.”

The group’s UK sales fell to £152m from £164 in 2015. In the European Union, sales were £15.8m, down from £19.9m the previous year. The rest of the world did see an increase in sales, to £5.1m from £3.1m.

Staff numbers fell to 368 from 381, leading staff costs to fall to £15.1m.