ROBERT Wiseman Dairies today forecast a more stable period for the milk industry after a year in which it lost deals with supermarket chains Asda and Morrisons.

Glasgow-based Wiseman, which runs a plant in Droitwich, unveiled a 15.3 per cent drop in annual pre-tax profits to £24.7m but described the results as "encouraging" against the backdrop of last year's events.

Chairman Alan Wiseman said: "We believe that with all the major retailers now having made their decisions about supply arrangements, we canlook forward to a period of greater stability within the industry."

Even after losing its £40m deal to supply Morrisons earlier this month, the group said its dairies would manage to process more milk than last year as a result of organic growth. It has been helped by the signing of contracts with Tesco and Sainsbury's. Wiseman said it was still looking at ways to offset the loss of the Morrisons contract, which will not be renewed when it expires in October.

Mr Wiseman said he was confident the foundations were in place to allow the company to return to profitable growth: "We were obviously disappointed to cease supplying Morrisons, but despite this, the board still expects that the new financial year should see a record level of sales volume and turnover."

The group said turnover increased by 3.1 per cent to £489.2m in the year to April 2.