ICE cream group Richmond Foods said a deal with food company Nestle had transformed its business after posting a surge in half-year sales.

The firm, from Richmond, North Yorkshire, picked up a host of brands, including Rolo, Smarties and Kit-Kat, when it bought Nestle's ice cream business last September.

The £9.9m deal particularly boosted Leeming Bar, the company's presence in the "eat now" impulse sales market. Richmond already has about 55 per cent of the supermarket own-label market, a key part of the "eat later" sector.

Turnover rose 30 per cent to £42.5m in the six months to March 31. Operating profits before one-off costs were ahead five per cent at £9.3m, despite the first half being a traditionally slow period.

However, the figures were hit by integration costs following the Nestle deal and an earlier acquisition of Allied Frozen Foods.

Richmond has closed a manufacturing site in Telford, Shropshire, and an administration centre in York since buying Nestle, and has also shut its own ice cream plant in Ashford, Kent.

Operations were consolidated at its expanded North Yorkshire facility, doubling capacity and improving efficiency.

But the cost of the overhaul - which included about 320 job cuts - meant that bottom- line pre-tax losses widened from £634,000 to £1.7m. But chairman Ross Warburton was confident for the months ahead.

The group saw a 60 per cent increase in sales during the first four weeks of the second half, helped by the Nestle brands and the warm Easter break. Stripping out the acquisition, like-for-like sales were still 15 per cent ahead.

Mr Warburton said: "We have established a strong trading platform for growth for both the remainder of the 2002 and beyond. I am particularly pleased with how the second half of the financial year has started."

He said the full-year figures should show a significant improvement on last year, when Richmond saw pre-tax profits of £795,000 on turnover of £88.5m.