Page last updated at 11:22 GMT, Monday, 12 May 2008 12:22 UK

Dairy firm issues profits warning

wiseman milk cartons
Wiseman believes its business is still in good shape

Robert Wiseman Dairies has warned that its operating profits are likely to take a hit of up to 8.5m for the current financial year.

The Glasgow-based group said rising costs and delays in implementing price rises were to blame.

The warning came as the company announced operating profits of 38.4m in the year to 31 March, an increase of 10.1% on a year earlier.

Chairman Alan Wiseman said he remained confident the firm was in good shape.

Further impact

Wiseman, which supplies supermarket giants Tesco and Sainsbury's, said in March it had started to implement higher prices in order to cover "unprecedented" pressure from rising materials, diesel, wage and utility costs.

However, the company said the process had taken longer to conclude than envisaged, and that the delay would have a 3m impact on profits in the first quarter of the current financial year.

Costs have continued to rise since negotiations with customers began, resulting in the further impact on operating profits of up to 2m.

The remainder of the profits impact will come from bulk cream sales, where there has been a "dramatic fall" in returns since late 2007.

Pointing to the company's new dairy at Bridgwater in Somerset, which is now fully operational, Mr Wiseman said: "We strongly believe this will provide us with the platform to continue our successful growth in the period ahead."

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