Wiseman raises profits and margins

The East Kilbride-based company, Britain's third-largest milk processor, has reported a pre-tax profit of 34.6 million in the year to 31 March , up 29.4 per cent on the previous year, as profit per litre rose 8.6 per cent to 2.39p.

A strong commodity market, driven in part by Australian droughts, has boosted milk prices, while Wiseman has released 60 new branded products in the past year, improving margins.

Chief executive Robert Wiseman said that, while the figure was an improvement on the margins which had fallen below 2p in recent years, the company was targeting a return to the historic profitability of around 3p per litre achieved in the 1990s, "but that doesn't mean it will necessarily happen any time soon".

Shareholders will reap immediate benefit from the results, with the total dividend raised by a third to 12p. Wiseman shares initially jumped 3 per cent on the news, closing up 4.25p at 474.25p.

In the past five years, Wiseman shares have risen from 125p, and the company said 500 staff who took part in the 2002 employee share scheme would share around 5m. Benefiting from a 20 per cent discount on up to 200 shares per month, some employees are set to benefit by around 50,000.

Wiseman also revealed its new dairy factory, at Bridgwater in Somerset, will eventually have the capacity to process 500 million litres of a milk a year, almost double its originally released plans.

Capable of processing 250 million litres a year when it opens in December, output could be expanded in two phases, increasing total capacity for the company by more than a third.

In a maturing market, the new facility will provide expansion room for the next 4-5 years, which could give it 30 per cent of the total UK market and make it the largest processor in the UK.

Wiseman is also billing Bridgwater as an environmental improvement, with the Somerset dairy factory closer to its Welsh and south-west of England suppliers, many of which produce organic milk on the clover rich pastures. While the number of tanker miles saved has not been disclosed, it is expected to be substantial, with milk being trucked north, the Manchester and Droitwich factories operating at full capacity, and Glasgow taking up some of the excess.

Wiseman said there were no plans on the table to build a fourth English dairy, though the plans may change in the future.

He also refused to rule out further share sales by himself or brother and chairman Alan, but said they remained the two largest shareholders "and I can see no reason for that to change any time soon".