SIMPSONS Malt has cited pressure on margins and higher processing costs as profits dipped in its most recent financial year. But the firm, which manufactures malt and trades as an agricultural merchant, said demand remained strong from the brewing and distilling sectors.

Accounts newly-filed at Companies House show that the historic family firm, which can trace its roots back to 1862, made a pre-tax profit of £7.5 million in the year ended December 31, down from £8.3m. Turnover climbed to £155.6m from £145.6m, amid strong demand for malt from its global craft brewing customer base.

Writing in the accounts, the directors note that demand for its speciality malt range was serviced by new production facilities commissioned in January of last year, adding that demand from distillers “remained steady”.

But the directors state: “Although malt sales values increased in line with malting barley costs, malting profit margins declined due to higher than expected processing losses and inflationary pressure on production costs.”

Meantime, the directors reported improved profitability and turnover from the merchanting business, driven by strong sales of fertiliser, seed grain and agrochemicals. While challenging climatic conditions affected cereal yields and quality across the UK and beyond, “grain trading margins remained static”.

The Simpsons’ directors said: “The merchanting business heads into 2019 with a healthy order book... and overall prospects remain positive.”

The firm’s average employee base increased to 263 from 249.