Perthshire bottled water firm Highland Spring taps into higher FY profits amid 'long hot' 2022 summer

Bottled water specialist Highland Spring Group has topped up its underlying profit as it seeks to strengthen its brand and its sustainability credentials.

Highland Spring says it achieved UK sales of more than 500 million litres in 2022, a year-on-year jump of about 3 per cent. Picture: Nick Mailer.

The company, which oversees 2,500 acres of land in the Ochil Hills, has revealed that it “modestly” increased its underlying operating profit to £4.5 million in 2022 from £3.4m in the prior year, and to 4 per cent from 3.6 per cent of turnover, while pre-tax profit more than doubled to £1.5m from £705,000. Overall, it achieved UK sales of more than 500 million litres, a jump of about 3 per cent from 2021, boosted by a “long, hot” summer, and saying it delivered growth by working to maximise product availability. However, interest costs jumped by £1.5m due to higher interest rates. 

The group – owned by billionaire Mahdi Al-Tajir, one of the richest people in Scotland – also said that for the third year running, and against a backdrop of challenging market conditions, it grew market share, and “extended its position as the UK’s leading natural source water brand for a sixth successive year”.

It also stated that bottled water was the seventh fastest-growing category in the retail grocery sector last year, and in terms of its own brand, said it performed ahead of the category, growing plain water volumes by 7.9 per cent, strengthening its position as the number one plain still water brand with share of volume growing to 13.9 per cent in 2022 from 13.1 per cent.

The firm added that building on the strength of its brand continues to be its main priority, with an increasing emphasis on expanding its portfolio of products and packaging formats in a sustainable way. Highland Spring also said 2022 saw the second full year of sales for its new flavoured cans and the expansion of its Hydration pack range to include a five-litre offering.

As for its efforts to be greener, it has committed to reaching net-zero greenhouse gas emissions across the value chain by 2040 from a 2019 base year. It pointed out the completion of its rail freight facility in Blackford, Perthshire, saying 40 per cent of the water supplied from its main bottling plant in the area will now be transported by train, removing 8,000 HGV journeys from the roads, and saving 3,200 tonnes of carbon dioxide a year.

Simon Oldham, who since 2021 has been joint MD of the group alongside Mark Steven, succeeding chief executive Les Montgomery, said: “The experience of the last three years has demonstrated the strength and resilience of the Highland Spring business and brand. I am proud of our robust performance against a backdrop of challenging market conditions.

"Our focus on environmental sustainability, which has been at the heart of our business for over 40 years, continues at pace, as we implement and explore opportunities to reduce our carbon footprint, which, in turn, supports our customers on their own net zero journeys.

“I remain confident in our long-term strategy of promoting the provenance of our brand, providing category leading expertise, focusing on environmental sustainability and contributing to overall value creation.”