JAMES Finlay, the tea giant founded in Glasgow, has enjoyed a big increase in profitability in the latest financial year amid growing demand for higher margin products.

The latest accounts for the group show it made £5.2 million profit before tax from continuing operations in 2015, compared with a loss of £0.5m.

Sales increased by around 18 per cent during the year, to £315m from £267m.

However, directors noted in the accounts that profit margins increased by 29.2 per cent.

The growth in profitability may reflect trends in global consumption habits that should benefit a business like Finlays. The group’s operations span the supply chain from running tea plantations in Kenya and Sri Lanka to producing soluble extracts that can be used to make instant hot drinks.

In the summer edition of the Finlays newsletter the company noted the global tea business is worth around $100bn per year, with roughly 60 per cent in the fast-growing ready-to-drink tea category.

Managing director Guy Chambers wrote: “Whilst we continue to face pressure on tea prices in our producing markets, we are also seeing strong growth in our extracts business, most notably in the US. This growth has largely offset the challenging tea prices, allowing us to remain close to our plan for the year.”

Founded as a cotton trading business in eighteenth century Glasgow, James Finlay diversified into industries such as oil services and banking before deciding in the 1990s to focus on tea.

The group was acquired by the London-based John Swire conglomerate in 2000 for £101m.

James Finlays' head office transferred from Glasgow's West George Street to London in 2007.

The company sold its horticulture division to the Sun Capital Partners private equity firm last year.

It has interests in industries such as coffee roasting and rubber production.