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Sales at Lees Foods snowball in the heat

SNOWBALL and macaroon bar maker Lees Foods has seen a 21.5 per cent rise in sales helped by warm summer weather boosting demand for its ice-cream cones and wafers.

EXCEPTIONAL GROWTH: Chief executive Clive Miquel is thrilled with new contracts as factory gets a robot upgrade.
EXCEPTIONAL GROWTH: Chief executive Clive Miquel is thrilled with new contracts as factory gets a robot upgrade.

However, the Coatbridge company, which runs Lees of Scotland and The Waverley Bakery, indicated a fair portion of the sales growth from £21.6 million to £26.3 million was a result of its branded snowballs and teacakes.

Those products both gained wider listings across England and Wales with supermarkets Tesco and Asda.

Chief executive Clive Miquel said: "That is quite a number of years we have had of continuous growth, but last year it was quite exceptional to grow the business by 21 per cent. We are quite pleased with that.

"We trade with most of the multiples so [the growth] has really been developing sales with existing customers, although getting some new contracts with them and getting [UK] listings.

"Previously with some accounts we tended to be only listed in Scotland, so getting national accounts made some difference. That has been a big bonus for us this year."

Along with that the warm summer months of 2013 led to a surge in demand for other lines.

Mr Miquel said: "The fine weather during July and August last year contributed to a significant uplift in sales of Carousel ice-cream cones and wafers, which continued the sales development at the Waverley bakery."

Lees said its underlying pre-tax profit grew from £1.2m to £1.4m in 2013. It had benefited from a one-off gain of more than £670,000 in its 2012 accounts following a claim against Her Majesty's Revenue & Customs (HMRC) for overpaid output tax on teacakes between 1973 and 1995.

Mr Miquel said he did not expect sales growth to be as strong in 2014 as it was last year, but said the business was focusing on improving its margins and profitability.

That will include an investment of £1.7m at the Lees of Scotland factory, which will see products packed by robots for the first time.

The eight robots are expected to be in place before the end of the first quarter next year.

Mr Miquel said: "That is quite a step forward for us in technology terms within the factory.

"The robots will pack snowballs and teacakes at 200 units per minute, which will make us more efficient and assist the product quality as well."

Mr Miquel said staff affected by the changes will be redeployed to other areas of the factory.

He said: "There will be no job losses as a result of the investment."

Mr Miquel said raw material price fluctuations are among the factors the company is trying to militate against. Chocolate and coconut are said to be particularly expensive at the moment.

Lees is also relaunching its confectionery range, including its well- known macaroon, coconut ice, tablet and fudge bars. Mr Miquel said: "This year the focus is on our confectionary bars, which we are redesigning and relaunching with quite a different look in October. This will include an evolutionary new design for the Lees Macaroon bar."

Mr Miquel, who led a deal to take Lees to the Alternative Investment Market in mid-2012, voiced worries if there were not to be a currency union in the event of a yes vote at the Scottish independence referendum.

He said: "Eighty per cent of our business is south of the border, so if there were any barriers to how we trade down south that would be a concern."

Mr Miquel said he felt Lees was benefiting from its move off the stock exchange. "While we wish to continue both sales and profit [growth] we don't have to live up to the expectations of the market."

The accounts show net debt narrowed from close to £2m to £834,017 in the year.

Average staff numbers were up from 291 to 314, with employee costs rising from £5.44m to £6.53m.

Directors' emoluments dipped from £717,230 to £638,562, with the highest paid seeing their remuneration fall from £175,793 to £170,827.

Mr Miquel's father, Raymond, stood down as executive chairman of Lees in 2009.

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