Wiseman milks collapse of rival to post increased profits

Oct 2 2009 by John Cranage, Birmingham Post

Robert Wiseman Dairies shares soared by five per cent yesterday after the company said profits were higher than expected after it picked up additional business following the collapse of a rival.

The Glasgow-based company, which operates one of Europe’s biggest milk plants at Droitwich, said sales volumes for the six months to October 3 were up more than ten per cent against a year earlier, leaving it on course to achieve stronger than expected interim profits.

Wiseman increased supplies to Co-op in June after the Dairy Farmers of Britain co-operative was closed by receivers. Its share of business with Tesco also held steady, while Wiseman commenced supplies to an additional 137 Sainsbury Local stores and benefited from deals with two large Spar wholesalers.

Investec Securities said the earlier-than-expected addition of the Co-op volumes should result in a 50 per cent jump in half-year profits next month. It also added £3 million to forecasts for full-year figures, at £37 million.

Wiseman provided a further boost to investors by revealing that increased capacity at its new Bridgwater dairy will be on stream prior to Christmas, slightly ahead of schedule and budget.

This will take volume capacity at the facility to 375 million litres a year, from 250 million litres.

Despite the revenues progress, Investec said it maintained a conservative view on the outlook for the second half of the year.

Wiseman, which yesterday carried a market value of nearly £320 million after shares rose by 20.4p to 441p, began trading from a family-owned farm in East Kilbride in 1947.