The company reported that its gross profit margin had been squeezed, particularly by raw material price volatility in the dairy sector.
It posted a pre-tax profit dip to £1.9M in the year to March 2014, versus £2.1M in the previous year, despite a review of its research and development tax arrangements having boosted profit.
The company also acknowledged that traditional bakery markets, a core source of sales for Macphie, had faced increased consolidation over the past year and customers had withdrawn from some commoditised sectors.
Consumer confidence increasing
That said, the company claimed 3.5% growth in turnover, from £42.8M to £44.4M across the year. That was primarily as a result of stronger trading across foodservice and food manufacturing channels, where consumer confidence was slowly increasing, it said. In addition, there had been an increased demand for reasonably priced, high quality products, Macphie claimed.
The company had seen improvement in sales in the Middle East as the economy there strengthened, while central and southern Europe continued to struggle, it said.
And it reported further signs of improvement in the trading climate, with the dairy sector apparently recovering from 2013 supply restrictions.
In addition to these hopeful signs, the firm said its board planned to continue with innovation and investment within its existing portfolio of products and operations.
‘Signs of recovery’
“The current economic climate will continue to be a challenge both in the UK and Internationally, however we are pleased to see some positive early signs of recovery,” said Macphie of Glenbervie chairman Alastair Macphie.
“Looking forward we will continue our significant operational capital investment programme and award winning employee development initiatives, to ensure we remain the vital ingredient for our International customer base.”