First Milk, the UK's largest dairy co-operative, has lost its seat on the board of Robert Wiseman Dairies - its biggest customer - after selling down its stake to 10% to raise money for expanding into cheese.

Beverley Hodson, First Milk's representative on the Robert Wiseman board, will stand down on Wednesday, after a five-year stint as a non-executive director.

Ms Hodson, a former boss at Dolcis and WH Smith, will not be replaced by a First Milk representative, a Robert Wiseman spokesman told Agrimoney.com.

The change follows First Milk's sale in November of 5.7% of Robert Wiseman for 450p a share, raising more than £18m for the co-operative to invest in a cheese expansion.

'Very close relationship'

First Milk earned its presence on the Robert Wiseman board by in 2004, when it bought its stake through a tender offer.

A spokesman for the Scottish-based co-operative said the companies retained a "very close relationship" despite the loss of the board seat, with First Milk remaining Robert Wiseman's biggest external milk supplier.

In November, First Milk said it had no plans to sell any further shares, with Robert Wiseman saying it envisaged "no change in our strategic partnership" with the co-operative.

'Good shape'

Robert Wiseman revealed Ms Hodson's departure as it said it had continued to raise the rate of sales growth, with like-for-like sales up more than 11% for the year to April 3 to a group record.

The price of bulk cream, a byproduct of milk processing sold largely to bakery groups, had stabilised after hefty falls late last year.

While oil-related costs were continuing to rise, increasing transportation charges and plastic bottle costs, the group was on track to report a "very satisfactory" set of annual results.

"Looking forward to next year, we are in good shape with volumes growing, a sound balance sheet, low gearing and state-of-the-art facilities," Billy Keane, the group's finance director, said.

Robert Wiseman shares closed 3.3% lower at 498p in London.