UK dairy group Robert Wiseman Dairies has warned that rising packaging costs could hit earnings despite sales being up almost 6% so far this year.


The company said today (4 July) the cost of high-density polyethylene (HDPE) continued to rise in recent weeks. “(HDPE costs) will impact our outlook unless these costs subside or we seek recovery in the period ahead,” company chairman Alan Wiseman said.


Nevertheless, the dairy group said the rise in sales volumes – up 5.9% on the year – was “satisfactory”.


“Milk values across the United Kingdom are rising on the back of global demand for skimmed milk powder and we are seeing a rise in the price we realise for our bulk cream sales,” Wiseman said.


Analysts Charles Stanley maintained its “hold” rating on Robert Wiseman shares. The UK-based stockbrokers said Robert Wiseman’s new dairy at Bridgwater would “ease Wiseman’s stretched capacity in England”.


Charles Stanley added that it expects the dairy group to recover the higher packaging costs in the second half of its financial year.