Shares in Robert Wiseman Dairies tumbled more than 14% this morning (12 May) after the UK dairy firm said rising costs would eat into profits this financial year.

The company said higher energy and wage bills, as well as delays in pushing through price increases, would hit operating profit to the tune of GBP8.5m (US$16.6m).

The warning came as Wiseman posted a 10.1% rise in underlying operating profit to GBP38.4m for the year ended 29 March. On a reported basis, operating profit fell 11.3% to GBP31.6m due to the fine Wiseman incurred for its role in last year's inquiry into price-fixing in the UK dairy sector.

Turnover was up 19.3% to GBP722m but chairman Alan Wiseman warned that the build-up in costs would hit profits in the year ahead.

"In recent months we have faced an accumulation of cost and revenue pressures that will, disappointingly, impact our profitability in the current year," Wiseman said.

Shares in the company fell on the news, reaching 427p at 11:02am BST, a fall of 14.08%

Nevertheless, Wiseman said the business is in good shape with its new dairy facility in Bridgwater up and running. He added: "We strongly believe this will provide us with the platform to continue our successful growth in the period ahead."