Wiseman reports consistent results
Results for the six months ended 2 October 2010 were “consistent with expectations,” with turnover increasing by 6.8% to £452.8m (EUR532.9m) in the period, and sales volumes up by 8%, UK-based Robert Wiseman Dairy reports. This has been offset by a reduction in the average price, reflecting the highly competitive environment. Much of the increased revenue was derived from cream, either from the increased returns from bulk cream or increased volumes of pot cream sold compared to the same period last year.
Gross profit improved by 3.7% to £97.9 million (2009: £94.4 million). However, operating profit decreased by £0.6 million or 2.7% to £21.0 million (2009: £21.6 million) resulting in an operating margin of 4.6% versus 5.1% in 2009.
“We recently reported intense competitive pressures across all sectors of the market. We anticipate this will impact our second-half trading profit by around £7 million and, assuming no improvement in margins or volume gains, by approximately £16 million in the financial year to 31 March 2012,” the company says.
“We have agreed changes to our supply arrangements with Tesco and are pleased to announce that we will supply them with an additional 35 million litres per annum,” the dairy states. “We remain committed to securing additional volume growth for our business and completion of the final phase at Bridgwater gives the group around 125 million litres of available capacity.”
Several of Wiseman’s major contracts have been renegotiated, and intense competition in the middle ground sector has reduced selling prices. While sales volumes have been maintained, margins across all sectors have been eroded.
The third and final phase to increase capacity at Bridgwater was completed this month on time for £2.4m, allowing it to process 500 million litres per annum. The total capacity available to the group, based on six day working, will amount to two billion litres.
Wiseman has gained additional school milk volumes in the last six months. “Further to this, we have undertaken the installation of a new filling machine at our Bridgwater dairy for snack size packs of fresh liquid milk. This plant and its installation will cost £1.5 million and will be completed this month,” the company says.
