Lees tastes bumper pay-out after HMRC loses £500,000 tax case

By PETER RANSCOMBE
Published on Saturday 28 January 2012 00:00

MACAROON bar maker Lee’s was enjoying the sweet taste of success last night after winning a claim against the taxman that dates back nearly 40 years.

The Coatbridge-based firm – famous for its meringues, snowballs and teacakes – will receive £500,000 from HM Revenue & Customs after over-paying tax between 1973 and 1995.

The windfall, which is expected to be paid within the next few weeks, is equal to the Aim-quoted company’s entire pre-tax profit for the six months to 30 June.

Shares jumped 3.7 per cent, or 7.5p, yesterday to 211.5p after the announcement was made.

Lee’s declined to comment on the settlement with the taxman. But the extra cash is expected to come as a boost for chief executive Clive Miquel, who was appointed to his post in October 2009, just a month after his father, Raymond, was ousted as chairman following a disagreement over the firm’s strategy.

Lee’s sales rose by about 6 per cent in the six months to 30 June to £10.2 million, but its profits dropped by 10.5 per cent to £505,000 on the back of rising raw material costs.

But Miquel said that steps had been taken to cope with the input price rises and that full-year profits for 2011 would be “well ahead” of the City’s £900,000 forecast.

The settlement from the Revenue will swell Lee’s cash balance, which already stood at £1.1m on 30 June, up from £500,000 at the same point in 2010. Miquel said the “strong” cash position had come despite the firm “maintaining an investment programme in plant and equipment in order to improve efficiencies”.

John Justice Lees, a grocer’s son from Coatbridge, invented the macaroon bar in 1931 while experimenting with chocolate and coconut above his father’s shop. His business grew and in 1982 began making meringues.

The company was bought by Northumbrian Fine Foods in 1991 but was taken back into Scottish ownership two years later by Raymond Miquel and business partner Klaus Perch-Nielsen.

Lee’s bought Edinburgh-based Waverley Bakery in 2003 and floated the group on the stock market in 2005.

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