THE Lion group's operating earning before tax reached $625 million despite its dairy and drinks division's shrinking sales.A trading update for the full year ending September 30 sees an operating earning increase of 5 per cent before interest and tax.
Lion chief executive Stuart Irvine said the company was trading in tough conditions but was seeing "good momentum" in its Australian beer, spirits and wine business.
"Top line growth is proving challenging in our dairy and drinks business, which operates in a highly competitive environment with discounting on white milk, juice and everyday cheese impacting margins.
"While returns remain unacceptably low, the dairy and drinks team deserves enormous credit for the successful implementation of a range of efficiency initiatives, which have delivered a full year profit improvement," Mr Irvine said.
The dairy/drink business saw a 10 per cent decline in business to $2535.6 million.
In a statement the company said it was driven by retailer-own-brand white milk contract losses and reduced branded sales in the grocery aisle.