Takeover target Warrnambool Cheese and Butter Factory could double its earnings in the current financial year as market conditions continue to improve.

Higher margins due to the company’s business improvement and strategic initiatives would also boost earnings, the dairy producer said.

Earnings before interest, tax, depreciation and amortisation (EBITDA) in the 2013/2014 financial year are expected to be in the range of $47 million to $52 million, up from $25.5 million in 2012/13, Warrnambool Cheese said.

The company last month rejected a $319 million takeover offer from Bega Cheese as too low and not having a high enough cash component.

Warrnambool Cheese chief executive David Lord said on Wednesday the improved earnings outlook was one of the reasons why the company was recommending its shareholders reject Bega’s offer.

More details of its financial forecast will be released when Warrnambool Cheese releases its target statement in mid-October, the company said.

WCB’s shares added five cents to $6.21 on Wednesday while Bega shares gained three cents to $3.60.