Tesco dairy supplier Wiseman posts 'encouraging' results

UK-based Robert Wiseman Dairies today reported a 12.2% increase in profits, but said higher raw material prices would cost it more than £1m (€1.44m) in the second half.

Glasgow-based Wiseman said pre-tax profits had risen to £15.3m (€22.2m) from £13.6m (€19.7m) in the six months to October 2.

The group, which secured 100 million litres in extra milk volumes in Britain from Sainsbury’s and Tesco earlier this year but lost a deal with Asda, said sales volumes had increased 7.4% to 607 million litres while operating profits lifted 3.7% to £15m (€21.7m).

However, the group said there had been steep increases in the cost of HDPE, the raw material used to make its plastic containers, with prices rising by a further 14% in the last two months alone.

Chairman Alan Wiseman said the first half had been encouraging, but that the second six months would reflect the timing of its contract gains and losses, in particular the Sainsbury’s and Asda deals.

It would also reflect the increase in fuel and plastic costs, both of which had risen further in recent weeks.

“As the new business wins settle in, the group will over time be able to reduce costs and restore margins,” Mr Wiseman said.

“Our portfolio of customers is second to none and we have the best invested facilities in the industry. We remain positive about our prospects.”