Greenock confectionery manufacturer Golden Casket, whose 99p bags of sweets appeared to be helping it ride out the recession, was soured by a price squeeze from supermarkets last year.
Pre-tax profits at the producer of Millions, Halfpounders, and Hill's Hawick Balls, dropped 28% to £908,000, some 20% below their 2009 level, though turnover fell only 7% to £19.2 million, according to accounts just filed at Companies House.
Owned by 80-year-old Douglas Rae and including Morton Football Club as a subsidiary, Golden Casket said early last year it was acquiring new factory space and investing £100,000 in upgrading it in the hope of new orders.
Mr Rae wrote in the 2010 accounts that he was confident of "at least matching the 2010 results in 2011", with a consequent boost for local jobs.
But employment eased from 58 to 56 in the year, as the company came under unexpected pressures.
Mr Rae writes: "Our trade with the supermarkets has held up remarkably well but our relationship with them has come at a price. Our profit margins have been squeezed by them through their failure to fully acknowledge the increases in the commodity market pricing."
Sugar and glucose had risen by 20% and Brazil nuts by over 100%, with large rises on butter and flavours. Mr Rae said: "We needed price increases of 9%, but were fortunate to get 3%."
The chairman repeated his complaint the company was prevented from making an offer to buy out Scottish confectioner Miller McCowan from administration last year, rescuing jobs that were lost in a sale to English group Tangarine.
He says when the companies for sale were advertised "we were very interested in acquiring them ... regrettably our interest although tabled correctly to the administrator was not followed through by him correctly as we did not receive a response until the companies were sold".
The Herald was contacted at the time by a second potential bidder for Miller McCowan, maker of Highland Toffee and Wham bars, who also claimed his interest in preserving the Scottish jobs had not been given proper attention. Tangarine sold off the production lines at Stenhousemuir and Broxburn and switched production to Blackpool and York.
Administrator Grant Thornton said at the time that Golden Casket's approach had arrived "when negotiations for the sale of the assets were under way with a number of parties", that the companies for sale had been widely marketed attracting 60 inquiries, and that it had achieved "the best possible outcome for the creditors of New McCowans".
Mr Rae says he has been offered other companies for sale, but none have been profitable, with identifiable brands or close enough to Scotland.
He writes: "We will continue to be vigilant and if the right companies become available then we will pursue our interest with haste."
Golden Casket is debt-free and shareholder funds rose from £11.9m to £12.6m. The chairman says it remains "in a strong trading position which we expect to strengthen in this coming year".
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