Rising costs and intense competition for market share have caused a significant drop in profits at Robert Wiseman Dairies.

Adjusted pre-tax profit for the year to 2 April was down 24% to £35.8m, on revenues that grew 3.5% to £917.5m.

The firm said that while it had either grown or retained business with all key supermarket customers, heightened competition to supply convenience and wholesale sectors had squeezed margins.

In addition, there had been a “sustained period of intense cost pressure” with rises in the costs of diesel, packaging and raw milk – its farmgate price increased 2.4p to 26.72p/litre during the year.

This cost pressure had eroded the extra income from higher milk sales and increased bulk cream prices, a statement by chairman Robert Wiseman said.

“The pressure on margins caused by higher input costs continues and is unhelpful, but we are working relentlessly to improve our cost base where possible. The board remains optimistic about the group’s long-term prospects.”

Robert Wiseman Dairies recently closed its operating facilities at Okehampton and Cupar and is targeting further cost reductions across the supply chain, from the collection of milk from farms, to processing, packing and distribution.

It is also keen to grow milk volumes and aims to increase the amount of milk supplied by the Wiseman Milk Group to at least 70% of requirements. Membership has grown and recently passed 1,000 members. To accommodate this growth, Wiseman Milk Group has started a £2m expansion of its raw milk reload depot at Market Drayton, due to be completed this summer.