6 days Ago By [email protected] (Lewis McBlane)
A shortbread company has warned of an “ever-tightening squeeze” on profits after reporting a six-figure loss despite rising sales. New accounts filed by Dean’s of Huntly reported a £345,430 loss, before tax, in the year up to June 30, 2024. The company, which bakes and sells a range of shortbread, biscuits and cakes had faced “hugely challenging” trading conditions, according to a statement from director William Dean.
Continued rises in the operating costs and the price of ingredients meant that the business had endured an “ever-tightening squeeze on profit margins”, he added. This year’s loss came despite turnover having risen by nearly a quarter to top £10 million - leading to a gross profit of £327,000. Sales over the year, according to the new accounts, had also increased by nearly £2 million with the percentage of non-UK sales rising from 12 to 17 per cent.
This tumbled to a six-figure loss due to the cost of raw materials, wages, transport and administrative costs. And the accounts also show that, despite the number of employees having decreased from 149 to 143 over the year, staffing costs increased by more than £500,000. However, the loss for 2024 was still £100,000 smaller than the previous year’s bottom line.
Despite the tough conditions, the report maintained that directors remained “confident for the future”, looking to new markets, new products and investment in technology and facilities. Looking forward, Mr Dean singled out soaring energy costs and the cost of living crisis as the biggest risks faced by the business in the current year. He added that, like other food and drink business, profits would be hit by the looming increase in employer’s National Insurance payments and directors were expecting “further pressure on margins for the year ahead”.
While compensating for the extra costs would be “challenging”, he added, the company would maintain “strong control over all costs” and would ensure efficiency. Directors at the company were paid a total of £217,092 over the year, along with dividends totalling £75,000. The accounts also state that - after the accounting period ended - the company had completed a “significant investment project” by taking over Duncan’s of Deeside shortbread at a cost of £1.
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