Falling cream prices meant that Robert Wiseman’s margins were badly dented in the first half; but it began to repair the damage in the second half with cuts to the price it pays farmers for milk, and charging higher selling prices to customers. Volumes were up almost 7 per cent to a record 1.62 litres, although this was helped by an extra week in the year.
Trading prospects look encouraging, too, even though bulk cream prices remain under pressure. The new dairy at Bridgewater is fully on stream and capacity is being raised there from 250m to 375m litres per year. And volumes should continue to build even though Tesco has cut the amount of milk it takes for its own brand fresh milk sales by 40m litres this year. But that will be more than offset by a new contract to supply the Co-Op with an extra 116m litres a year although there will be a hiatus in milk sales until that deal kicks in this August.
The sharp fall in headline earnings per share last year show the scars of the recent change in the treatment of tax allowances on industrial buildings. On an underlying basis EPS fell by 8 per cent to 31.8p.
Investec Securities has upgraded its 2010 normalised pre-tax profit estimate from £31.5m to £33.5m, giving EPS of 32.4p (2009: £32.6m and 31.8p), reflecting the margin improvements.
| ROBERT WISEMAN DIARIES (RWD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 347p | MARKET VALUE: | £251m | |
| TOUCH: | 344-350p | 12-MONTH HIGH: | 421p | LOW: 294p |
| DIVIDEND YIELD: | 4.3% | PE RATIO: | 38 | |
| NET ASSET VALUE: | 186p | NET DEBT: | 19% | |
| Year to 4 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 489 | 25.2 | 28.4 | 8.0 |
| 2006 | 568 | 26.7 | 25.4 | 9.0 |
| 2007 | 605 | 34.6 | 33.4 | 12.0 |
| 2008 | 722 | 29.2 | 26.8 | 14.0 |
| 2009 | 848 | 30.8 | 9.19 | 15.0 |
| % change | +17 | +5 | -66 | +7 |
Ex-div: 29 Jul Payment: 17 Sep | ||||
