Wiseman feels milk margin pinch

Sales and revenues were up but profits dropped at Robert Wiseman

Robert Wiseman has announced a drop in its operating profit of 9% to £35.1m and warned margins on milk sales were unlikely to improve in the coming year.

The East Kilbride-based company said it had experienced a year of "considerable volatility".

The firm had a better second six months after high costs hit first-half results.

However, revenues rose 17% to a record £847.7m and sales volumes rose 4.9% to 1.62bn litres over the year.

Chairman Alan Wiseman said he was "pleased" with the improved performance, but added pressure from costs and competition would see the firm's margins per litre of milk in the current trading year similar to last year.

We have been successful in rebuilding margins in the second half to provide a solid base for our business going forward Alan Wiseman Chairman

The firm suffered in the first half of the year after delays on passing on higher selling prices to customers until October.

Wiseman was also hit by one-off financing costs and a higher tax bill due to the government's decision to phase out tax relief on industrial buildings.

But Mr Wiseman added: "We have been successful in rebuilding margins in the second half to provide a solid base for our business going forward."

The biggest contributor to this growth was the Co-operative Group.

The company boosted existing supply deals with Sainsbury's, discounter Netto and the Martin McColl Group, the UK's biggest chain of newsagents.

This helped offset supermarket giant Tesco's "disappointing" decision to reduce milk volumes from Wiseman earlier this year.

The business operates from seven major processing dairies in Aberdeen, East Kilbride, Glasgow, Manchester, Droitwich Spa, Okehampton and Bridgwater.

The firm was founded by Robert Wiseman Senior - the current chairman's father - in 1947.

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