Northumberland firm Simpsons Malt Ltd says it is well positioned for the future, despite taking a hit in profits during an extremely challenging year for the industry.
The group, headquartered at Berwick-upon-Tweed, manufactures malt and operates as an agricultural merchant in the North of England and Scotland.
Financial statements for the year ended December 31, 2013, showed turnover remained roughly the same as 2012, going from £157.6m to around £157.9m. Profit before tax, however, dropped £1,5m to £7.5m,
A directors’ report said the weather had been a major factor, impacting on sales margins. A challenging fertiliser market in the second half of the year had also contributed.
However, the report said: “The long-term prospects for our core malt markets of distilling and brewing remain very positive and a recovery in sales margins is expected.
“Our merchanting business performed well in an agricultural sector that had to deal with the legacy of an exceptionally wet 2012 autumn sowing season and the challenges of an extremely cold 2013 spring.
“Our grain trading, agrochemical and fertiliser businesses experienced difficult trading conditions throughout 2013 whilst our cereal seed and animal feed businesses were well placed to meet customer demand.”
The malting business likewise maintained sales volumes and malt quality, although the “unusual” characteristics of the 2012 malting barley crop resulted in increased processing costs and lower sales margins.
The malting business has also continued to invest in the security of its supply chain and the overall balance sheet for the family-owned maltster has strengthened, with net assets increasing by 10% to £55m.
Managing director Tim McCreath said: “We are pleased to report another set of solid results in what has been a very challenging year for the industry.
“After the very poor harvest of 2012, the conversion from malting barley to malt was the worst we have ever seen, increasing our costs by £1m. This together with the challenging fertiliser market in the second half of 2013, attributed to a drop in profits.
“There are however many positives to report, including the completion of the company’s four-year £30m investment in the maltings at Berwick-upon-Tweed, in addition to the acquisition of storage facilities at Craigswalls, near Duns in the Scottish Borders.”