Aberdeenshire shortbread manufacturer Dean’s of Huntly has reported back-to-back losses despite taking its turnover above £10 million.
The Huntly firm said it remains upbeat about the future despite dealing with a number of challenges.
Dean’s financial results for the year-end June 30 2024 showed pre-tax losses of £345,000, improving from £448,000 losses in the prior year.
However, the manufacturer saw turnover rise to almost £10.2m, up from £8.3m in 2023.
Dean’s of Huntly also reported a drop in its average staff numbers for the year, down to 143 from 149.
Rising costs despite ‘keen focus’
The strategic report, signed off by managing director William (Bill) Dean, said directors had a “keen focus” on costs in its last financial year.
However, due to uncontrollable elements administrative costs for the company rose around 12% to £3.1m.
Mr Dean said: “The year continued to be a hugely challenging one due to increasing raw material and operating costs resulting in an ever tightening squeeze on profit margins.
“Despite the difficult economic climate of the increased cost of living, the directors are pleased to report an increase in turnover for the year of just over 23%.
“Which resulted in an increase in the gross profit value of £327,000.
“Direct operating costs, particularly raw materials, wages and transport, also increased.
“These rising costs dampened the overall gross profit return, reducing the margin percentage return by around 2%.
“The directors remain confident for the future, implementing their strategy to develop new markets, growing both Dean’s own brand and private label opportunities.”
Can acquisition help Dean’s of Huntly with losses?
In February, Dean’s of Huntly announced the acquisition of a rival firm in order to build on its growth.
It has added fellow shortbread company Duncan’s of Deeside to its operations and took its workforce to 180.
Dean’s of Huntly said the deal will enhance its market share in the premium shortbread sector.
Bill said: “The acquisition of Duncan’s of Deeside enables us to build on our recent successful organic growth by acquiring a well-established, high-quality business in the shortbread market.
“We are excited to build on the successful journey begun by the Duncan family and their team.”
The firm will also leverage the combined expertise and synergies, with Duncan’s of Deeside managing director Paul Duncan staying on as part of the merger.
Meanwhile his parents and founders, Len and Dawn Duncan, have retired.
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