Highland Spring more than doubled profits last year on rising turnover as it extended its lead as the UK's number one bottled water brand despite inflationary challenges and supply chain issues.

Simon Oldham, who took over as sole managing director earlier this year, declared his confidence in the Perthshire-based company's strategy as it held its own against CO2 shortages that led to an overall decline UK retail sales of sparkling water.

READ MORE: Highland Spring remains steadfast on DRS

Sales across other categories were helped by the particularly long hot summer of 2022, with bottled water one of the few to deliver both volume and value growth to make it last year's seventh-fastest growing category in the retail grocery sector.

"The experience of the last three years has demonstrated the strength and resilience of the Highland Spring business and brand," Mr Oldham said. "I am proud of our robust performance against a backdrop of challenging market conditions."

Pre-tax profits rose to £1.52 million compared to £705,000 previously, while turnover increased from £94.1m to £113.1m. Overall, Highland Spring reported UK sales of more than 500 million litres, an increase of 2.9% on 2021.  

Sparkling's share of total water in retail channels dropped from 15.3% of plain packaged water in 2021 to 14.4% in 2022, but within than Highland Spring maintained its leading position by raising its market share to 15.5% versus 15.4% a year earlier.

Those same supply chain issues also meant that some larger rivals from abroad had difficulties getting enough of their goods onto UK shelves. Highland Spring benefitted by filling many of these gaps for retailers, gaining new shoppers and increasing its UK household penetration.

Plain water volumes by grew by 7.9%, strengthening the company's position as the number one plain still water brand with volume share rising from 13.1% in 2021 to 13.9% in 2022.

READ MORE: Scottish water giant Highland Spring appoints sole boss

The company said building on the strength of the Highland Spring brand continues to be its main priority, with an increasing emphasis on expanding the business’s portfolio of products and packaging formats in a sustainable way. This saw the successful expansion of the Hydration pack range into a new five litre size, along with the second full year of sales for the new Highland Spring flavoured cans. 

A new rail freight facility at the company's bottling plant in Blackford was completed and commissioned, meaning that 40% of all production is now transported by rail. This will take approximately 8,000 lorry journeys off the roads each year, saving an estimated 3,200 tonnes of CO2 annually.

The company has committed to reaching net-zero greenhouse gas emissions across the value chain by 2040 from a 2019 base year. At the end of 2022, for the 15th year running, Highland Spring was named the leading ethical bottled water brand in the UK by The Good Shopping Guide.  

READ MORE: Highland Spring cuts losses despite downturn in demand during pandemic

“Our focus on environmental sustainability, which has been at the heart of our business for over 40 years, continues at pace, as we implement and explore opportunities to reduce our carbon footprint which in turn, supports our customers on their own net zero journeys," Mr Oldham said. 

“I remain confident in our long-term strategy of promoting the provenance of our brand, providing category leading expertise, focusing on environmental sustainability and contributing to overall value creation.”  

Mr Oldham became the company's sole managing director on July 1, having previously held the post jointly with Mark Steven since August 2021. Mr Steven officially retired at the end of June.

Highland Spring is owned by the family of Middle East businessman Mahdi al-Tajir, who founded the business in 1979.