Walkers Shortbread cites butter price woes
In the company’s full year results for the period ending 31 December 2018, Walkers has revealed a degree of turbulence in the performance of the firm over the past few years.
Despite this, turnover at the family-owned company rose by 2.7% to £147m, supported by growing exports.
Pre-tax profit rose to £7m, compared to £5m the previous year. Operating profit reflected a similar rise.
“Our financial performance was impacted by a further increase in the wholesale price of butter, only part of which has been recovered through improved customer pricing,” a statement said.
“The burden placed on the group by this increase on costs has, without a doubt, made the past two years some of the most challenging in our history.
Very strong balance sheet
“While the business remains robust, with a very strong balance sheet, our operating profit remains significantly lower than it was historically.
“The current level of profit reported against a backdrop of growing revenues has seen our operating margin contract from 9.2% in 2016 to 3.6% in 2017. This was before rebounding to 4.9% in 2018.
“This is substantially short of the level required to provide what the board consider an acceptable return on the assets employed.”
The firm added that its profitability remained constant as a result of the Walkers brand, which formed the lion’s share of its operating margin.
Meanwhile, it was reported last month that shortbread maker Burton’s Biscuit Company had acquired Paterson Arran, one of Scotland’s leading independent food companies, broadening its product portfolio.
