Wiseman creams off £45m in profits as turnover increases

City experts forecast a profit of no less than 45 million for the year to 3 April, compared with 42m last year. Turnover is expected to reach about 876m, exceeding last year's 848m.

But Wiseman warned rising costs of diesel and plastics remain a concern for the year ahead.

Group finance director Billy Keane said: "We are on track for a very satisfactory set of results for the year to 3 April.

"Looking forward to next year, we are in good shape with volumes growing, a sound balance sheet, low gearing and state-of-the-art facilities."

Milk volumes have continued to increase, as noted in January's interim management statement.

Overall milk sales volumes are up more than 11 per cent for the year on a like-for-like basis, which is expected to set a new record for the East Kilbride-based group.

Wiseman added: "We highlighted that the surge in bulk cream prices in the quarter to December 2009 had improved margins and this one-off benefit, while welcome, is unlikely to repeat itself in the forthcoming year."

Wiseman said its year-end debt will increase due to the early payment of its second interim dividend of 12.25p, which will be paid on 1 April at a total cost of 8.7m.

The firm said capacity at its Bridgwater diary in Somerset increased to 375 million litres a year before Christmas, slightly ahead of schedule and within budget.

The planned final phase of capital expenditure on the site – which will take capacity to 500 million litres – is said to be on track for completion in October at a cost of 10m.

Wiseman told investors it was pleased with the performance of its new distribution depot at Amesbury, in Wiltshire, and that it anticipates completing the transfer of runs from other depots by next month and thus realise "efficiencies in trunking and distribution costs".

Analysts at Shore Capital – which carries a "buy" recommendation and 513p target price on the company – said: "We view Robert Wiseman as one of three core holdings in the small-to-mid-cap arena under our coverage, with best in class operations, strong cash flow and the expectation of rising income credentials."

Wiseman is due to issue its full-year results on 17 May. Shares closed down 3.3 per cent at 498p, against a 52-week high of 525p.

Beverley Hodson, who joined the Wiseman board in 2005 to represent the interests of major shareholder First Milk, will resign today but will remain a director of First Milk.