Wiseman reassures anxious investors after FY results
concerns after announcing a disappointing decline in the company's
full-year profits, stemming from last year's loss of a lucrative
contract to supply Asda with fresh liquid milk, Tom Armitage
reports.
Turnover increased by 3.1 per cent to £498.2 million during the 52 weeks prior to 2 April, stemming from buoyed sales volumes of its liquid milk, which increased by 2.2 per cent to 1.21 billion litres.
The company's operating profits fared slightly better than analysts' expectations, despite falling 19.5 per cent to £24.6 million (compared to last year's £30.6 million).
The East Kilbride-based company proposed a final dividend payment of 5.8p and a full-year total of 8p - an increase on last year's payments of 5.25p and 7.25p, respectively.
Indeed, it has been a turbulent year for all of the UK's major dairy processors, which have had to wait anxiously for the UK's major multiple retailers to reorganise their fresh liquid milk supply contracts.
Last year, for instance, Dairy Crest had contracts to supply Tesco and Sainsbury's terminated, while Wiseman was awarded a contract to supply Tesco, helping to offset the earlier loss of a £70 million contract to supply Asda with fresh liquid milk to rival Leeds-based processor Arla Foods.
Earlier this month, Arla and Dairy Crest had their lucrative contracts to supply fresh milk to UK multiple retailer Morrisons extended, while Wiseman was dropped.
This contract, which will end in October this year, accounted for £50 million of Wiseman's turnover for the months up to April, although will not affect the company's accounts until next year.
Alan Wiseman, Wiseman's chairman, commented: "For Robert Wiseman the net result of these contract changes in terms of volumes sold is expected to be broadly neutral."
"We continue to enjoy organic growth from our multiple retail customers who are still winning market share from declining doorstep sales," he added.
"This has been a difficult year for the UK's milk processors, which have all been adversely affected by deteriorating prices and cost pressures, particularly rising plastics and energy costs," one analyst told DairyReporter.com.
Wiseman, however, said that he was confident that the company could restore the company's profitability: "We believe that with all the major retailers now having made their decisions about supply arrangements, we can look forward to a period of greater stability within the industry."
The company also confirmed that there would be several changes to its board, with Alan Wiseman becoming non-executive chairman, while his brother Robert will leave his current role as managing director to become the Wiseman's chief executive.
