Just days after telling farmers it would slash their milk price by 2.2p/litre, Robert Wiseman Dairies has today announced “satisfactory” financial performance for the second half of the year to date and said it is in ‘good shape’ going forward.
In an interim management statement, the company reported that sales volumes and turnover for the 17 week period to 24 January 2009 were “in line with management expectations” and the business continued to generate strong cash-flows.
It said that volume growth was running at 6.3%, compared with 2.6% for the first half-year and, despite funding a large capital expenditure programme at its new Bridgwater site in Somerset, RWD anticipated debt at 4 April 2009 to be similar to the £50.2m level seen at 27 September 2008.
The company said it had benefited from additional business with the Co-operative retail group in south-east England and confirmed that from 2 March 2009, it would start supplying another 172 co-op stores. Sales of its extended shelf life and own milk brands continued to do well, as did Fresh’n’Lo milk sales, after a major promotion by supermarket giant Tesco.
RWD said that the 2.2.p/litre farmgate price cut that takes effect from 1 February would help overcome some of the company’s profit shortfall caused by falling cream prices, previously estimated to be worth around £7m. “We now expect the potential profit shortfall not to be as great as we had originally anticipated,” the statement said.
“We remain confident that, with our new Bridgwater dairy now operating to its planned initial capacity and construction of our new depot at Amesbury expected to commence in early April 2009, we are in good shape going forward.”
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