Teacake firm Tunnock’s gets double-digit sales lift

Bumper overseas sales helped confectionery firm Thomas Tunnock grow turnover by more than 10 per cent last year but investment to increase capacity and rising costs left profits flat.

Tunnock's is one of Scotland's most iconic brands. Picture: Robert Perry

The Lanarkshire-based maker of teacakes and caramel wafers saw turnover increase to £58.1 million in the year to 24 February, up from £52.6m the previous year, with pre-tax profits edging down by £22,000 to just under £4m.

UK sales rose by 7.8 per cent to £48.1m but domestic growth was outstripped by a 24 per cent increase in overseas sales to £9.9m.

It is thought demand for the company’s products in overseas markets is continuing to benefit from the worldwide exposure secured when its tea cakes played a starring role in the opening ceremony of the 2014 Commonwealth Games in Glasgow.

Capital expenditure rose to £9.9m during the year, up from £6.8m the previous year as the company invested in its production facilities with a self-funded 20,000 square foot extension to increase manufacturing capacity at its Uddingston factory which completed after the year end.

Tunnock’s said the investment was “essential to maintain our position at the forefront of the market and was part of the business strategy to expand producing capacity”.

During the year dividends of just over £2m were paid to the Tunnock family which owns the business, double the previous year’s figure.

Staff numbers rose by 30 to 577 and the highest-paid director at the company received a total pay package of £168,124, up from £158,899.

In a brief statement, the company, which is headed by 85-year-old Boyd Tunnock, said that trading “remains very competitive” and thanked customers and employees for their “continued loyalty and support”.

The Tunnock’s business was established in 1890 and the factory has been on the current site for more than 50 years. The investment in additional production capacity has seen a number of new staff taken on since the financial year end.

Last year, Boyd Tunnock hit the headlines after being revealed as the mystery donor of a £235,000 Rolls-Royce to Glasgow City Council.

The Rolls-Royce Ghost has replaced one of the council’s Volkswagen Phaetons that was due to have its lease renewed and the council said it would save the city money.

The car, which bears the council’s unique “G0” number-plate, will be used by the Lord Provost and other city representatives for offical duties and carry high-profile visitors.