Macphie sees profits soar but warns it won't last

Published on Thursday 20 December 2007 20:29

MACPHIE of Glenbervie, the Stonehaven-based food ingredients manufacturer, has boosted annual profits by 12 per cent to £3.8 million, according to accounts lodged with Companies House.

But the company, which also grew sales by 2 per cent to 39.5m, gave strong hints that it does not expect the success to be repeated in the current financial year.

Its chief executive, Alastair Macphie, said that the results – covering the year to March 2007 – came "against a backdrop of unprecedented raw material increases, energy costs and an inflationary-averse food market. This will be a hard act to follow in the current financial year".

He added: "A spate of poor harvests and changing global demand for commodities means that raw material costs have soared and this is hitting the food industry hard.

"Looking to 2008, these pressures look set to continue industry-wide. As we plan ahead, the board's primary concern is how to minimise the adverse effects of raw material increases on future margins."

While production volumes of Macphie's products grew, selling price deflation in some sectors hit its margins.

Macphie added: "These factors, combined with a weak US dollar, are placing pressure on our competitiveness in several key markets, for example the Middle East."

Macphie's core product is in bakery ingredients, which are supplied to a market now seen as mature. The company is targeting the food-service sector, reporting "significant inroads" in line with its current, three-year corporate plan.

Macphie also committed the firm to invest to ensure growth, citing its biomass energy plant at its Glenbervie site, which is due to be operational by the middle of next year.

Scotland's first industrial biomass plant, it is expected to reducing the firm's carbon emissions by approximately 2,000 tonnes a year.