Record exports totalling £50million helped Walkers Shortbread to a bumper year, new accounts have revealed.
Profits at the family-owned Aberlour firm hit £14.6million for 2012, up from £8.6million the previous year.
Joint managing director Jim Walker said yesterday the firm was delighted with the “steady” 12 months of growth. But he tempered this with a warning that the resurgent pound and rising dairy prices could make 2013 “more tricky”.
“The growth in profitability was a much-needed respite after several years of margin erosion,” he said, announcing the figures yesterday. “Limiting the effects of food and raw material inflation, whilst managing the quality of the ingredients we source, remains top of our agenda.
“This continues to present the business with very real challenges and although 2012 saw a temporary easing of pressure in the dairy sector, the price of other commodities has continued to rise.”
Short supplies of milk are pushing the price up, he said. “In recent months, the business has started to face a number of significant cost pressures, particularly in the dairy sector, and this will adversely impact the returns generated in the current year. Further cost increases are also expected as we move forward and the outlook for 2014 is not encouraging.”
Among those cost pressures is the strengthening of the pound.
Mr Walker said: “Over the past few years, the export size of the business has benefited from the underlying weakness of sterling. In recent months, we have become concerned with its appreciation which, if maintained, will squeeze margins and affect growth.”
But Mr Walker said the firm is now working at its manufacturing peak in the run-up to Christmas. He said: “We are pleased to report the number of people employed recently passed 1,650, an all-time record for the company, making a significant contribution to the local economy.
“We have continued to grow, which is very pleasing – we would rather have steady growth than peaks and troughs, so we can support steady employment.”