HIGHLAND Spring has cited the effects of rising raw material costs as it reported a fall in profits in its latest financial year.
The Perthshire-based mineral water brand said pre-tax profits dipped by nearly one-third to £3.3 million from £4.9m as it took steps to absorb the impact of rising plastic costs. Operating profit fell by nearly 25 per cent to £4.2m
However, the company signalled that it had traded strongly throughout the year, with sales climbing by more than 10% to exceed £110 million in the year ended December 31.
Highland Spring, which makes its still and sparkling water in Blackford, Perthshire, also said it had reclaimed its position as the UK’s leading bottled water over the period.
The company said it had retaken the stop spot from Evian as it flagged that it has a 17.5% share of the country’s bottled water market.
Mark Steven, group finance director, said: “One of the core strategic principles for the group is the development of the Highland Spring brand.
“We are proud to have regained the number one branded position in the UK market, being the first UK bottled water brand to exceed sales of 300 million litres.
He added: “We continue to have confidence in the UK bottled water market, which has grown for the ninth consecutive year with annual growth of 8.1% in 2017.
“Based on our market insight and the continued demand for healthy products, we are confident that there continues to be a strong market for natural source waters.”
The company, which is owned by Middle East businessman Mahdi Al Tajir, said the period had seen it encounter significant rises in the price of PET (polyethylene terephthalate). Mr Steven noted the firm was taking steps to mitigate the short-term impact of the cost increase by improving production efficiencies and “re-engineering our product range to encourage light weighting of materials.”
He said: “We invested in excess of £20m in increasing bottling capacity in 2016 and 2017 to meet current and anticipated market demand which enabled the installation of two new production lines at our Blackford facility. This includes the fastest, most technologically advanced PET bottled drinks line in the UK and we were honoured to have the new facility officially opened by HM The Queen in July 2017.”
The company noted that it was “focused on meeting the needs of a truly circular plastics economy”, having earlier this year undertaken a trial of 100% recycled plastic bottles to help cut ocean pollution. Announcing the move in June, Highland Spring said the pilot would commence with a 500ml “eco bottle” in selected Tesco stores in Scotland, followed by Sainsbury’s stores in England.
Chief executive Les Montgomery said at the time: “Plastic is a valuable resource that shouldn’t be treated as waste and we encourage everyone to get involved in this trial.
“This is a significant step that is part of a longer-term roadmap to eliminating plastic waste as more and more consumers recycle their plastic bottles and we can source recycled plastic in the quantities and quality we need.”
The company added yesterday that it supports a new report from the Cambridge Institute for Sustainability Leadership, which Mr Steven said “sets out a roadmap to eliminate plastic packaging waste in the drinks sector by 2030.”
A spokeswoman said Highland Spring would be filing its accounts for 2017 at Companies House today. The accounts will show that average employee numbers increased by 8% to 519.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here