AYRSHIRE bar operator Buzzworks Holdings has cited the impact of rising supplier and wage costs as profits dipped in its most recent financial year, which saw it invest heavily in refurbishments and secure its first outlet on the east coast of Scotland.

The family-owned firm, whose 11 outlets include venues trading under the Scotts and Lido brands, reported a pre-tax profit of £120,679 in the year ended April 29, down from £694,248 last time.

That came as Buzzworks, owned by siblings Alison, Colin and Kenny Blair, hiked turnover by nine per cent to £16.2 million.

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Writing in the accounts, Kenny Blair said the company experienced over the period “continued external pressure from increased supplier costs and the impact on rate of pay from [the] National Minimum Wage and National Living Wage”.

They also warn that in the “current economic and political climate, there is a risk of suppliers passing on further costs due to a combination of currency fluctuations and uncertainty, product supply and consumer demand.”

But the directors note they are “pleased that our cost base is being well controlled. The blended margin; salaries and overhead costs came in line with expectation.”

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The period saw the operator spend £1.8m on new venues and to develop staff and existing units, which included the acquisition of its second outlet outside its native Ayrshire. Work is under way to develop what will be Scotts Port Edgar Marina in South Queensferry, a 220-cover bar and restaurant which overlooks the Forth road and rail bridges and the Firth of Forth.

Buzzworks invested £1m over the period to develop The Coach House bar and restaurant in Bridge of Weir, in the former Archies lounge bar and kitchen. It was the fifth outlet to be opened by the firm under its House brand, with the project creating 40 extra jobs in the Renfrewshire town.

Meanwhile, £400,000 was invested by Buzzworks on refurbishments at The Tree House in Ayr and on acquiring the premises next door, since renovated and relaunched as the T bar.

The firm’s expansion activity saw its average employee number climb by six per cent to 466.

A new work life balance initiative was rolled out at a cost of £100,000, the firm said, which means staff can decrease their working week without cutting pay, and overtime being paid for every hour worked or time in lieu.

Buzzworks’ managing director Kenny Blair said: “2018 has seen the business grow further, as we opened our first venue outside of Ayrshire in Bridge of Weir. Now with two sites in the east and further negotiations on sites 13, 14 and 15, we are forging on with our planned growth strategy for the future and the focus is on making 2019 even more successful.

“Even with industry wide challenges including rising supplier costs, alongside the uncertainty of Brexit, we have continued to not only increase our turnover, but invest heavily in both the portfolio and our people.

“Our staff are what define us and are integral in creating the foundations of a long-term, successful hospitality business.”