Wiseman wins £14m Sainsbury deal

ROBERT Wiseman Dairies has signed a £14m contract with Sainsbury’s to supply stores in the north of England and the Midlands.

The contract win, after a three month supply trial, represents around 10% of Sainsbury’s total fresh milk requirements and completes Wiseman’s access to the major supermarket groups.

Analysts believe the deal is worth £14m to the East Kilbride company.

Chairman Alan Wiseman said: "This is a significant development for the company and will be helpful in building volume for our Droitwich Dairy. We hope over time we can further develop our business with Sainsbury’s and this is the beginning of a fruitful relationship for both companies."

Strong sales and an improving performance from its £35m dairy in Worcestershire are helping the company to meet forecasts of profits of £18m for results due on May 14.

Billy Keane, the group finance director, said: "This is brilliant news and we’ve worked hard to win the contract."

The Droitwich operation began in April last year and runs with a 200 million litre capacity. Keane expects to reach 500 million litres over the next few years.

Late last year, rival Express Dairies criticised Wiseman’s decision to open the site in the West Midlands. Express Dairies’ chief executive Neil Davidson said: "In a market already over supplied, another factory coming on stream, putting in even more capacity than was needed, is obviously going to put pressure on margins."

Speculation continues that Wiseman is looking for acquisitions but Keane said: "We have our own strategy for growth but if something lands on a plate beside us we’ll look at it."

However, analysts say the Sainsbury win will push Robert Wiseman into the top spot.

"This contract backs up our firm belief that Wiseman will be the largest player in the UK within five years," said Harry Nimmo, investment director at Standard Life Investments.

He added: "This contract vindicates that Wiseman’s strategy is appropriate and I’m very positive about their future prospects."