Profits dip for UK milk processor

UK milk processor Robert Wiseman Dairies has reported a decline in pre-tax profit after losses and costs associated with reorganisation and an inquiry by Britain's Office of Fair Trading.

Pre-tax profit fell more than 10 per cent to £16.5 million (€26m), down from £18.5 million the year before, but only after £2.1 million in costs - including £700,000 in "OFT costs".

"We are pleased that the underlying profitability of the group showed a small increase," Wiseman said in a statement.

After a month-long OFT investigation into Scottish fresh milk supply, the trade regulator announced last June that it would impose limits on the prices Robert Wiseman could charge for milk in Scotland.

The OFT said it wanted to prevent "serious, irreparable damage" to rivals Claymore Dairies and Express Dairies and protect the public interest.

Shares in Wiseman lost a fifth of their value over the next five months, until a bid approach for Express Dairies, Britain's biggest milk supplier, triggered speculation about buyouts in the dairy sector and boosted Wiseman shares.

The stock was unchanged in pre-market dealings on Tuesday at 125 pence, around last June's level.

Wiseman has also expanded its activities, saying on Tuesday that England and Wales accounted for 60 per cent of its business, helped by a new Sainsbury's contract and increased store allocation with Safeway and Somerfield .

Robert Wiseman milk volumes rose 13.4 per cent to 920 million litres in the year to the end of March, with turnover rising 24 per cent to £371 million.