UK dairy group Robert Wiseman Dairies has said it is confident of regaining supply volumes lost during the current bumper period for dairy suppliers.
In a trading statement issued as it closes its first half, Wiseman said the strong commodity returns and record spot market prices had resulted in some of its milk suppliers resigning from their contracts in a bid to seek better returns elsewhere.
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However, the company stressed that it did not anticipate any problems replacing the lost volumes and had already signed up a “significant number” of new producers.
Wiseman reported that its volume and turnover for the first six months of the current fiscal year are in line with expectations.
Wiseman added that in spite of prevailing intense competition, margins in the first half had continued their slow recovery and would be “broadly in line” with the second half of the last financial year.
However, rising raw material costs, particularly plastic, and commodity prices remained a concern, the company said.
“The six-month period has seen unprecedented rises in commodity prices exerting significant upward pressure on milk prices across the world,” said group finance director Billy Keane, adding that Wiseman had responded to these pressures by ensuring all its milk suppliers received significant milk price increases.
“During the year to date, we implemented a series of milk price rises that lifted our milk price from 18.7 pence per litre (ppl) in February to 25.7ppl from 1 October and maintained our reputation of paying a table-topping price,” Keane said. “This increase of 7ppl (37.4%) has been successfully recovered from the vast majority of our customers who have understood the reasons for such dramatic increases.”
Wiseman will publish its results for the six months to 29 September on 12 November.
