SCOTTISH caramel wafer and tea cake manufacturer Thomas Tunnock has pushed annual turnover above £50 million, and benefited from HM Revenue & Customs’ decision that its snowballs should be reclassified as not subject to VAT.

The family-owned company’s latest accounts, which have just become available from Companies House, reveal that its turnover rose by about seven per cent to £51.3m in the year to February 28. The company notched up turnover of £47.8m in the prior 12 months.

Sales per employee rose to £108,000, from £98,000, in the year to February.

A spokesman for the company, which is controlled by Boyd Tunnock, said: “The results highlight the strength of our brand reflected in our quality products, which reach a worldwide market.”

The accounts show “non-recurring exceptional other operating income” of £1.4 million. In a statement, Thomas Tunnock said: “The company…benefited from a decision by HMRC that their snowball range of products be reclassified as non-VATable.”

The £1.4m one-off gain boosted pre-tax profits to £7.59m in the year to February 28, from £6.48m in the prior 12 months.

Operating profits, which exclude this gain, fell slightly to £5.96m in the year to February from £6.19m in the prior 12 months.

The growth in turnover was driven by sales in the UK, although Thomas Tunnock continued to ship millions of pounds worth of its products to export markets.

The accounts show that the company’s UK sales rose to £43.2m in the year to February 28, from £38.8m in the prior 12 months.

Sales to the rest of the world dipped to £8.1m in the 12 months to February, from £9.09m in the prior financial year.

Canada, the US, Saudi Arabia, Australia and South Africa are among the markets in which Thomas Tunnock has enjoyed success over the years.

In the accounts, Thomas Tunnock highlights the importance of continuing heavy investment to its business. It says that it continues to invest in new plant, with capital expenditure of £3.04m in the year to February 28, compared with £3.35m in the prior 12 months.

The company adds that such expenditure is essential to maintain its “position at the forefront of the market”.

And it says: “We continue to review the possibility of extending the products within our range.”

The accounts show that the average monthly number of employees at Thomas Tunnock in the year to February, at 475, was down marginally from 489 in the prior 12 months.

The company, which is based at Uddingston in Lanarkshire, said: “Thanks is given to all employees for their continued commitment.”

Directors’ remuneration rose to £456,722 in the 12 months to February, from £446,438 in the prior financial year.

The remuneration of the highest-paid director rose to £146,544, from £144,719.