The council were looking to stop providing lunches and milk to schools after it was reported many were choosing to source their catering services elsewhere.
However, the Liverpool Echo has reported that the council-run service has generated a profit of £136,000 profit in 2014/15.
Cllr Nick Small, cabinet member for education, told the Liverpool Echo: “We agreed last year to give the service time to work with schools to improve menus and it has successfully done that.
“We’re now in a position where the service is not just covering its costs but is making a contribution to the council’s coffers, helping with the cost of providing essential services.
“I’d like to congratulate the team on their hard work in turning the situation around.”
The service provides meals to 30 schools and milk to 120 sites across the city