Robert Wiseman Dairies posted increased interim turnover and profits yesterday, but warned that the economic storm clouds are gathering.
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Excluding reorganisation costs, pre-tax profits were posted as £9.5m (US$13.4m), in line with the previous year. Turnover meanwhile was up 22.5% from the previous year to £178.5m and operating profit increased 5.3% to £10.8m, from £10.3m.
Wiseman also revealed that it is looking towards its £35m Droitwich dairy, built in April last year, for growth over the next four or five years. Already supplying milk depots at Wolverhampton, Bristol and Taunton as well as Droitwich, the facility has recently guaranteed new business from the Somerfield and Safeway supermarket chains. Negotiations with Sainsbury’s are under way.
Financial director Billy Keane is quoted in the Birmingham Post as saying: “We hope to maintain our position but there are some clouds on the horizon and our forecast is that market conditions will get more difficult.”
This cloud is signified by falling cream prices. As a by-product of semi-skimmed low fat milk, “the revenue is worth £1m annually and if it falls it drops straight off the bottom line,” he explained.
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By GlobalDataDoorstep deliveries of milk are also continuing to fall, he said. Currently such business amounts for about 27% of the company’s total milk sales in England and Wales, but it is falling by about 13% annually.
Farm gate prices have also improved during the past 12 months, meaning that Wiseman has paid its milk suppliers an extra 3.5p to 4p a litre.
