Walkers Shortbread cites butter price woes

In the company’s full year results for the period ending 31 December 2018, Walkers has revealed a degree of turbulence in the performance of the firm over the past few years.

Despite this, turnover at the family-owned company rose by 2.7% to £147m, supported by growing exports.

Pre-tax profit rose to £7m, compared to £5m the previous year. Operating profit reflected a similar rise.

“Our financial performance was impacted by a further increase in the wholesale price of butter, only part of which has been recovered through improved customer pricing​,” a statement said.

“The burden placed on the group by this increase on costs has, without a doubt, made the past two years some of the most challenging in our history​.

Very strong balance sheet​

“While the business remains robust, with a very strong balance sheet, our operating profit remains significantly lower than it was historically.​

“The current level of profit reported against a backdrop of growing revenues has seen our operating margin contract from 9.2% in 2016 to 3.6% in 2017. This was before rebounding to 4.9% in 2018.​

“This is substantially short of the level required to provide what the board consider an acceptable return on the assets employed.​”

The firm added that its profitability remained constant as a result of the Walkers brand, which formed the lion’s share of its operating margin.

Meanwhile, it was reported last month that shortbread maker Burton’s Biscuit Company had acquired Paterson Arran​, one of Scotland’s leading independent food companies, broadening its product portfolio.