The decision by Tesco to reduce the volume of milk it buys from Robert Wiseman Dairies will cost the company about £2m in profits in the 2010 financial year, the milk group said. In spite of the setback, Wiseman said it expected to deliver profits ahead of market expectations for the year to April 3.

The market decided the news was on balance good, with Wiseman shares rising 10¾p to close at 322¾p. Brokers had been expecting the group to report pre-tax profits of about £26m for the current financial year, but Investec, the group’s broker, raised its forecast to £30m following the update. It reduced its 2010 forecast by £2m to £30m to reflect the reduction in the Tesco business. In the 2008 financial year Wiseman reported normalised profits of £36m.