Overall milk sales have grown by 8.5% in comparison to the same period last year, with sales benefiting from volume gains made in the previous year. The company remains confident that sales volumes for the year to 2 April 2011 will be in line with expectations.
The company anticipates that its financial performance in the first half-year will be broadly in line with expectations. Going forward, however, as a result of recent intense competitive pressures across all sectors of the market, operating profits will be impacted. While anticipated volumes for the year remain unchanged, operating profits will be impacted by around £7m in the second half of the year to 2 April 2011, and assuming no improvement in margins or volume gains, by approximately £16m in the full financial year to 31 March 2012.
A Robert Wiseman Dairies statement said that the reduction in anticipated profit’s were ‘very disappointing’, but the company believes it’s best placed within the dairy industry to manage the impact of a highly competitive trading environment going forward.
The company’s financial performance continues to be impacted by volatility in oil-related costs, which have remained higher in the current period than in the equivalent period of the previous year. While fuel costs have eased, the cost of plastic hasn’t declined by the same level. The higher oil related costs incurred have been mitigated by the contribution from higher cream revenues, which have exceeded those generated in the same period of last year. These higher returns also helped support an increase in the price paid for raw milk supplies from August.
Plans to install the final element of capacity at Bridgwater are progressing satisfactorily and the dairy will have a total capacity of 500m litres per annum available from November 2010. Further to this, Robert Wiseman has a dairy and depot network in place to enable the medium-term target of 2bn litres of sales to be met.
The company intends to maintain the total dividend payments for the current year at 18p per share in line with last year and retain a strong balance sheet with low levels of debt.
Interim results for the six months ended 2 October 2010 will be revealed on 15 November 2010.
Source: Robert Wiseman Dairies
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