Highland water firm with a spring in its step

The UK's largest supplier reported record sales up by 7.5 per cent to 54.8 million as recession-hit Britons opted for home-based brands, said the company.

"As the economy has suffered, people seem to get more loyal to brands from within their own country," said Les Montgomery, chief executive of the privately-owned group.

"It is applying throughout the category - British brands have been in the ascendancy. The same thing has happened in other product categories as well."

Warmer weather than in the previous year lifted sales across the sector, but Highland Spring's sports-oriented marketing efforts allowed it to grow ahead of the market. The company is in its fourth year of sponsoring British tennis number one Andy Murray, and is also active in cycling, golf, athletics and rugby.

Operating profits for the year surged well ahead of sales growth, up 89 per cent to nearly 4.4m. Montgomery said this followed a cost-cutting programme begun at the end of 2008, as Highland Spring negotiated keener deals with suppliers, pared back on expenses and boosted efficiency.

Though the company has a policy of no lay-offs, it did agree with staff to put a moratorium on replacing workers who left for other reasons. The resulting headcount reduction of 30 saved Highland Spring several million, allowing it to give those who remained a pay rise and bonus in October last year.

"You can ask people to stretch for a while, but you have got to be sure to give them the reward at the end," said Montgomery, adding that Highland Spring had now resumed normal recruitment levels.

Following the 17.5m acquisition of Greencore's bottled water business earlier this year, Highland Spring expects to sell 350 million litres this year.

The business, based in Blackford, Perthshire, is owned by the Dubai-based Al Tajir family.