WALKER’S Shortbread hiked turnover but reported a fall in profits as soaring costs hit the bottom line during its most recent financial year, new accounts show.

The Aberlour-based baker, which was founded by Joseph Walker in 1898, highlighted strong trading in the US and the UK as revenue surged by 16% to £164.6million in the year ended December 31.

Sales in the UK leapt by 23% to £77m, driven by a strong post-pandemic festive season, while in export markets revenue increased by nearly 10% to £87.6m. The company sells its shortbread, biscuits, cakes, and oatcakes, to more than 100 international markets.

READ MORE: Speyside: GlenAllachie releases long-awaited peated malt

Walker’s said sales growth was underpinned by a successful rebrand, which launched in 2021 and continued during 2022, and its recovery in global travel retail as air travelled returned for many passengers following Covid restrictions.

However, pre-tax profits dipped to £5.1m from £6.8m the year before, amid pressure on global supply chains intensified by Russia’s invasion of Ukraine and inflationary pressures which forced up the cost of raw materials and squeezed service levels.

The company said it responded to these challenges by introducing new production efficiencies and procurement strategies which it said contributed to gains in the year but were not enough to prevent profits falling.

At the start of last year, Walker’s announced that it had appointed Nicky Walker as its new managing director, making him the fourth generation to head the company.

The former Rangers and Hearts goalkeeper, who had joined the firm 25 years previously, took over from his uncle Jim Walker, who had run Walker’s with brother Joe as joint managing directors until his passing in October 2021.

READ MORE: Historic Loch Lomond hotel sold to Scottish leisure group

Walker's has in recent years highlighted the difficulty it has faced in recruiting staff locally, with Brexit having exacerbated those problems. Nicky Walker said today that labour restrictions remain a challenge for the firm.

New accounts show Walker's employed an average of 1,253 people across the group over the period, up from 1,212. Payroll costs increased to nearly £39m from £35.8m.

Nicky Walker said: “It was pleasing to see demand return in a substantial way through 2022 after a couple of challenging years during the Covid-19 pandemic.

“The year presented numerous hurdles however, not least the continuing restrictions in the local labour market, but also substantial price increases coming from our suppliers. This volatility forced a review of all our incoming costs, with proactive conversations held with our entire supply chain.”

Mr Walker said a post-pandemic lift and the return of travel and tourism had been key to achieving top-line growth over the period covered by the accounts, alongside the rebranding which will continue in global markets this year and next.

He added: “The Walker’s brand relaunch was exceptionally well received last year, and we are excited at the prospect of the continued roll out through the remainder of this year and into next as we look forward to supporting the business’ aspiration for sustainable growth.

“I’d again like to acknowledge the support of our incredible team, whose efforts are invaluable to the business. It was especially pleasing that as part of our 125th anniversary celebrations in June we were able to say thank you to them in person, along with their families, at a company event.

“I, along with the board and executive committee, continue to focus our efforts on moving the business forward, further developing it for a bright, sustainable future”.