Competition hits sweets firm Golden Casket
Millions maker is on the look-out for acquisitions
GOLDEN Casket, the Greenock-based confectionery company, has seen profits slide by more than 30 per cent – in spite of turnover breaking through the £20 billion barrier.
The company, which owns a majority stake in Greenock Morton Football Club, cited intense competition among firms competing for supermarket sales as it posted pre-tax profits of £430,986 for the year ended December 31. Profits were booked at £623,925 the year before.
The drop in earnings came in spite of turnover surging by 12 per cent to £20.5 million.
Writing in accounts newly available at Companies House, chairman Douglas Rae said: “The year 2013 was a satisfactory one for our company.
“Turnover remained steady yet our gross profit dropped a few percentage points due to the intense competition currently from companies who previously did not “chase” business with the UK multiple groups.”
Mr Rae has previously indicated the company’s appetite to acquire further confectionery businesses to boost turnover.
However he conceded in the accounts there is no immediate sign of any deals being done.
Instead, he said the business will look to drive sales in the supermarket sector, having previously focused on the independent sector with brands such as Millions chewy sweets.
He revealed the company plans to develop sales by boosting its manufacturing capacity and broadening its product range in a bid to meet the multiples’ needs.
Shortly before publishing its 2012 accounts last year, the
We are going to purchase some expensive machinery in 2014 so that we can widen our range of production.
company invested £600,000 in a new production facility after winning a deal to supply ownlabel sweets to Asda. At that time the company was supplying about 4,000 independent retailers.
Mr Rae said: “We have agreed with the landlords of the estate to add yet further factory space at the estate.
“In addition, we are going to purchase some expensive machinery in 2014 so that we can widen our range of production as it appears that acquisitions of profitable companies seems unlikely currently. We are aware of the products that the multiple groups are interesting in acquiring.”
The latest accounts for Golden Casket show a fall in dividends paid by the company to £99,600 from £111,000 in 2013.
Staff numbers dropped slightly to 45 from 48, with the wage and salary bill falling to £1.2 million from £1.29 million, and directors remuneration decreasing to £133,475 from £159,405.
The accounts break down the turnover contributed to the firm by confectionery activity and Morton FC, in which the company now holds 88.56 per cent of the ordinary shares. Morton, which currently plays in Scottish League One, saw turnover rise to £846,070 from £748,755 in 2012.
Mr Rae has a personal holding in Morton which stood at 4,556 ordinary shares at December 31, unchanged from the year before.
The confectionery business reported turnover of £19.6 million, compared with £17.5 million, which included £543,970 of turnover in Europe, down from £571,789.
Mr Rae added: “Although we are still on the lookout for acquiring a profitable, successful company to enhance our business turnover we regrettably have failed to find a company that fits in with our requirements.
“Additional turnover will be targeted in 2014 through the widening of the product range that we offer.”