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Malt supplier blames £1.5m profit drop on extreme weather

SIMPSONS Malt has blamed the weather for eating into its margins and sending profits down 17%.

The family-owned business, which supplies malt into the distilling, brewing and food sectors as well as acting as an agricultural merchant, reported only a marginal uplift in turnover from £157.6 million to £157.9m in 2013.

In the UK turnover actually fell from £150.9m to £148.2m but there was a pick up in exports from almost £6.7m to £9.7m.

The company, founded in 1862, previously said it has benefited from the growth in the Scotch whisky industry.

It has seen strong increases in sales since posting £109m turnover in 2010.

However in spite of trimming administrative expenses and distribution costs in the 2013 trading year profits came in at £7.5m, behind the £9.05m it had booked in the prior year.

Writing in accounts just filed at Companies House the directors said the grain trading, agrochemical and fertiliser parts of the business experienced difficult trading in 2013.

They added: "Our merchanting business performed well in an agricultural sector that had to deal with the legacy of an exceptionally wet 2012 autumn sowing season and the challenges of an extremely cold 2013 spring.

"The malting business ­maintained sales volumes and malt quality although the unusual characteristics of the 2012 malting barley crop resulted in increased processing costs and lower sales margins.

"The long-term prospects for our core malt markets of distilling and brewing remain very positive and a recovery in sales margins is expected."

The company said it had bought grain storage facilities, which it previously leased during the year, and had also completed the final phase of steeping facilities at its Berwick-upon-Tweed base.

A £6.5m capital spending charge was noted on its balance sheet, which compared to £5.3m in the prior year.

Staff costs dropped from £9.8m to £9.4m with average employee numbers steady at 205.

Directors' remuneration came in at £1.42m, which was lower than the £1.84m from the previous 12 months.

The highest paid director in the business saw their emoluments fall from £523,000 to £406,000.

There was an equity dividend of £998,000 paid, which was down on the £1.16m allocated in 2012.

Simpsons Malt also shaved more than £1.7m off its net debt across 2013, finishing the year on a figure of £47.3m.

The fifth generation of the Simpson family is now working in the business.

The core malt division produces more than 280,000 tonnes each year.

The agricultural and trading arms, which include the Angus based John Guthrie business it acquired in 2010, procure around 300,000 tonnes of barley from farmers across Scotland and England.

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