The Courier & Advertiser (Fife Edition)
Wool firm to grow despite costs warning
The boss at a Kinross cashmere firm is warning of “significant challenges” due to inflation and rising energy bill costs.
Todd & Duncan dyes and spins cashmere and lambswool yarns for some well-known names in high fashion.
The firm was impacted severely by the Covid-19 pandemic and saw sales drop 25% in 2020.
But managing director Iain Cormack was “absolutely delighted” at the company’s financial results for the year to December 2021.
Newly published accounts show turnover increased from £21 million the previous year to £23.9m.
The firm also recorded a pre-tax profit of £1.2m – compared with a pre-tax loss of £1.3m in 2020.
Mr Cormack said: “We’re absolutely delighted, especially through the difficulties we had through Covid.
“I’m pleased to say volume of yarn sales our was up 25% year-on-year. That was better growth than we anticipated.
“We were back to full production for all of last year, and that helped.”
Mr Cormack warned inflation and rising utility bills will be among the biggest problems Todd & Duncan will face in the next 12 months.
He said other issues include Brexit and recruitment.
“Inflation is a big problem for us,” he said.
“A lot of the products we’re buying are oil-based so a lot of them have been impacted by inflation.
“Utility costs are a big challenge for us – it’s our biggest cost after labour.
“That is going to put a significant additional burden on to the business.
“We’re hopeful we can pass those costs on – we’d rather not have to do that – but I don’t think it will come as a shock to customers.
“We may not get all the costs passed on but the costs of inflation are real.”
Despite those challenges, the firm’s parent company is planning to invest.
The ultimate parent company is Zhejiang Xinao Textiles Inc, a Chinese wool and cashmere company listed on the Shanghai stock exchange.
It plans to make a sevenfigure investment in Todd & Duncan.
Mr Cormack said: “We have ordered additional spinning and winding equipment which will increase annual production capacity by around 22%.
“That will give us a big uplift. We’re looking at 60 tonnes on top of our current capacity of 260 tonnes per annum.”
Mr Cormack also paid tribute to the firm’s 210 employees.
He said they had played a major role in helping the business, which has traded since 1867, through Covid.
“Their efforts were integral to us coming out of the pandemic in an organised fashion, they’ve been excellent,” he said.
Mr Cormack wants to add to the workforce with 10 new jobs.