Baxters Food Group has posted a rise in annual profits after revenues climbed on the back of strong growth in the US.
The iconic family-run firm, which celebrated its 150th anniversary this year, reported a 10 per cent jump in gross profits, excluding exceptional items, to £109.3 million for the year ended 31 March.
Ebitda (earnings before interest, taxes, depreciation, and amortisation) at the Edinburgh-headquartered company rose 15 per cent to £34.3m, while group revenues increased by 14 per cent to £338.3m.
Revenues in the US market, where Baxters acquired military rations provider Wornick Foods in 2014, rose to $259.2m (£205m), marking a 25 per cent increase year-on-year and accounting for around 60 per cent of total turnover.
Speaking to The Scotsman, executive chairman Audrey Baxter attributed this performance to a combination of a “buoyant” US economy and the growing market for own brand goods.
Due to an increase in emergency relief work in the US following severe hurricanes in 2017, the division provided almost nine million units of emergency meals over a concentrated period of three months.
Baxters’ Canadian operations, the sale of which it completed in May, also provided “significant profitable growth” following a recent transformation plan. Baxter said its recent sale has allowed the company to “shore up its balance sheet”.
Baxter, who is the fourth generation of the family to lead the company, said she was pleased with a “confident” set of results, but that a difficult European market and continued Brexit uncertainty posed concerns.
She said: “Europe is a difficult marketplace, but we’ve gone constant. We’re feeling very positive about where we can go with our Polish business, and we’re looking at central Europe in our strategy as well.”
However, she said the British food industry urgently needs clarity regarding the Brexit process, as the business indicated it would have no choice but to start stockpiling goods in the coming months.
She said: “Brexit is a serious matter for the food industry. To make a robust [business] plan you have to be quite clear on the impacts of all factors that affect the capability of the business. With Brexit we really do not have that clarity.
“We’re well aware that we are in difficult times here in the UK and I think businesses need some help from the politicians and need some direction.”
Mike McGill, chief financial officer, added: “This uncertainty may require us to build raw material stock resources in advance of 30 March. Commitment of significant sums of money to purchasing materials that may ultimately prove to be unnecessary is not an efficient use of the group’s capital resources, but nonetheless essential.”
The Moray-founded group, which employs more than 1,500 people, moved its headquarters to Edinburgh earlier this year.