A2 Milk has answered its critics where it matters most - the bottom line.

The stock, which has polarised opinion in the investment community, has been under fire from various quarters over share sales by top management, worries about the regulations in China, and ongoing scepticism about the validity of claims around its a1 beta free milk - this time from the US dairy sector.

The company says its a1 beta protein free milk can be beneficial for people who have trouble digesting standard milk, which contains both the a1 and a2 beta proteins.

In an earnings update issued at the annual meeting in Melbourne, a2 Milk said its net profit shot up by 64.5 per cent to $86 million in the first four months of its financial year, compared with the corresponding period last year - a record.


Revenue for the four months came to $368.4m, up 40.5 per cent over the same period last year, which was at the top end of market expectations.

The company turned in a net profit after tax of $195.7 million the June year, up 116 per cent over the previous year's.

Chief executive Jayne Hrdlicka said she was not concerned about a bid by the US National Milk Producers Federation to get a2 Milk to row back on its US advertising claims.

Senior federation executive and lawyer Clay Detlefsen has called on a2 Milk to "defend and substantiate" its advertising and marketing claims, and to participate in an official process started by the federation's complaints.

Hrdlicka said she was confident a2 Milk would be successful in the US, where it has lifted its points of distribution by 50 per cent in the first four months.

"We know that we are rattling the big US dairy players because we are in effect shaking up the category and we know that we are taking market share in all segments of milk consumption," she said.

"At our heart we are a disrupter. It has taken this company a lot of time to get to a strong position today and that's because we are dogged in doing the right thing by consumers."

Shane Solly, portfolio manager at Harbour Asset Management - which has a stake in a2 Milk - said the company had made inroads into the US, repeating a pattern that started with a big incursion into the Australian fresh milk market where it now has 10 per cent of the market and 33 per cent of the infant formula market there.

"While the US dairy industry may not be seen as being particularly innovative, the retailers are," Solly said. "But they have a long we to go."

Investors are still smarting from the sale by Hrdlicka about $4.3 million worth of shares in a2 Milk shares awarded to her as part of her package in September after just two months in the job, which precipitated a steep decline its share price.

Australian media reported a2 Milk chairman David Hearn as telling the annual meeting the company could have better communicated to the market the transition arrangements - which were aimed at compensating Hrdlicka for leaving her previous employer, Qantas.

"With the benefit of hindsight, we certainly could have done things perhaps differently," Hearn said.

A2 Milk was skimpy about its prospects for the full year, other than to say that it expected strong revenue growth to continue but at a slightly more moderate rate than in the first four months.

Hrdlicka said the company had a well managed "daigou" unofficial trading network in China and had been anticipating rule changes governing the trade - announced in August - for some time.

Momentum in China infant formula - where it now has 5.6 per cent market share - has continued to build for a2 Milk.

"As we have said on several occasions, the a2 Milk Company and our well managed daigou network, have been anticipating and preparing for these changes for some time," she said.

A2 Milk's share price has been on a roller coaster ride since its listing in 2004.

This time last year, the stock traded at $7.84 before almost doubling to $14.10 in March.

It last traded at $10.30, down 17c, well off its peak for the day of 11.11, while the market overall was sharply weaker.