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Tunnock's success still tasting sweet

SCOTTISH caramel wafer and tea cake manufacturer Thomas Tunnock more than trebled its operating profits in its latest financial year as sales at home and abroad surged.

SUPPORt: Boyd Tunnock controls the family company, which saw operating profits soar to £3.63m. Picture: James Galloway

The strong performance of Tunnock, against a weak UK economic backdrop, is revealed in accounts which have just become available from Companies House.

Tunnock's operating profits leapt to £3.63 million in the year to February 29, from £1.09m in the prior 12 months.

The family company, which is controlled by 79-year-old Boyd Tunnock, reported pre-tax profits of £3.84m for the year to February 29, up from £3.41m in the preceding 12 months.

However, the underlying rise in pre-tax profits appears from the accounts to be nearly £2.5m because the prior-year figure was stated after a £2.03m one-off gain believed to have resulted from the completion of two trade-related legal actions.

Tunnock's turnover jumped to £37.9m in the year to February 29, from £32.6m in the prior 12 months.

Sales in the UK rose to £30.8m, from £27.9m. Sales to the rest of the world leapt to £7.02m, from £4.65m.

Bruce Reidford, Tunnock company secretary, highlighted growth of about 20% in sales to Saudi Arabia by the Uddingston, Lanarkshire-based company in the year to February.

He noted annual sales to Saudi Arabia are "well over £1m". He added exports to the country were made on an agency basis, with Tunnock's products then distributed around the Middle East.

Mr Reidford said the initial contact in Saudi Arabia had been made by Mr Tunnock during a trade mission decades ago.

He added that demand for Tunnock's products in the Middle East came mainly from the indigenous population, as opposed to British ex-pats.

Mr Reidford also highlighted Tunnock's growing sales in Australia and South Africa.

He described the results for the year to February as "good". And he thanked the company's generally long-serving workforce. Tunnock currently employs about 520 people.

Mr Reidford said: "They work very hard and are very loyal to the family."

And he revealed that growth had continued into the current financial year.

Asked if he expected sales to rise further in the 12 months to February 2013, Mr Reidford replied: "In the current financial year, things are looking promising. Growth has been maintained. Hopefully, that will continue over the festive period."

Mr Tunnock, who will be 80 on January 25 next year, still has a very hands-on role in the business and comes in on a daily basis.

Tunnock also makes wafer cream biscuits, snowballs, and caramel logs.

Its biggest seller is the caramel wafer, followed by the tea cake.

Mr Reidford estimated Tunnock produced more than 10 million biscuits each week. He put the weekly production of caramel wafers at more than five million.

He said Tunnock sold its products in about 30 countries, with Canada and the US among its established overseas markets.

Mr Reidford noted the company's overseas markets included Surinam, in South America.

He highlighted Tunnock's continuing heavy investment in production technology. Its capital expenditure amounted to £1.76m in the year to February.

"We are always looking to the future and investing heavily in machinery," he said.

Mr Reidford emphasised Tunnock's intention to remain a family business.

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