Robert Wiseman Dairies, the UK dairy group, today (29 January) revealed that its move this week to cut milk prices would reduce an expected fall in profits for the second half of its fiscal year.
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In a trading update, Wiseman said its decision to lower milk prices from 1 February would mean the company expects “the potential profit shortfall not to be as great as we had originally anticipated”.
When Wiseman published its first-half results in November, it had warned that a fall in bulk cream returns would hit second-half profits by as much as GBP7m (US$9.9m).
Wiseman said today that cream income had fallen by 18.6% in the quarter to December 2008, compared to the previous three-month period to September.
However, its decision to cut the price it pays to its farmer-suppliers by 2.2 pence a litre from the beginning of next month has alleviated the impact on earnings.
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By GlobalDataMeanwhile, Wiseman’s recently-signed deal with UK retailer The Co-operative Group has boosted volumes, which rose by 6.3% in the second half of the firm’s fiscal year – up from 2.6% in the first half of the year.
Sales with the company’s other major customer are “in line with our expectations”, Wiseman said.
Wiseman plans to issue a pre-close trading update on 30 March.
