Highland Spring sees operating profit drop

Bottled water firm Highland Spring has seen operating profit for 2018 fall by nearly half, mainly due to higher raw material costs.
Les Montgomery is chief executive of Highland Spring, whose annual sales now exceed 300 millionlitres. Picture: contributed.Les Montgomery is chief executive of Highland Spring, whose annual sales now exceed 300 millionlitres. Picture: contributed.
Les Montgomery is chief executive of Highland Spring, whose annual sales now exceed 300 millionlitres. Picture: contributed.

The Blackford-based business, led by chief executive Les Montgomery and owned by the Al-Tajir family, said underlying operating profit saw a year-on-year drop of 43 per cent to £2.37 million, although it hailed a "strong" performance by the business with sales revenues exceeding £110m.

Annual sales of the Highland Spring brand - which sponsored the 2019 Solheim Cup - now exceed 300 million litres, with the group’s share of the total UK bottled water market at 16.4 per cent.

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It highlighted its focus on environmental sustainability, saying a strong focus on business efficiencies enabled it to respond to variations in market conditions, through improved ways of working and increased use of "one of the fastest, most technologically advanced" polyethylene terephthalate (PET) bottled drinks line in the UK.

Its 100 per cent recycled and recyclable Highland Spring eco bottle has now been rolled out permanently across the UK, and the firm aims to introduce more recycled plastic across the Highland Spring range. The company will also continue to invest in projects to reduce the amount of PET plastic in the manufacture and production of Highland Spring products with a goal of decreasing its use of PET plastic by 20 per cent.

It also said a new rail siding next to its main bottling plant is being planned in partnership with Transport Scotland and the Scottish Government, saving 3,200 tonnes of CO2.

Chief operating officer Mark Steven said: “We are proud to have grown the Highland Spring brand, to enable us to maintain the No.1 branded position in the UK, adding over 23 million litres to volume sales.

"Based on our market insight and the continued demand for healthy products, we are confident that there continues to be a strong market for natural source waters, which grew for the tenth consecutive year with annual growth of 7.9 per cent in 2018."

While he noted the impact of major jumps in raw material costs, he added: "Significantly improved production efficiencies at our main Blackford facility, alongside a strong focus on supply chain management, have helped to partially off-set these material price increases. These improved efficiencies also helped us deliver higher levels of customer service and maximise sales in periods of peak demand.

"We believe consumer education on recycling is central to closing the loop on plastic waste. We will continue to invest in activities which increase recycling rates and encourage the careful and responsible disposal of used products through our ‘Love to Recycle’ campaigns.”

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