Aberlour on Spey / UK. (wsb) According to its annual report and accounts, Walkers Shortbread Limited saw profits slashed by difficult trading conditions in its fiscal year 2008, even before the economic slowdown. 2007 was not much better, where the company talked about a strong year and significant effects on the future of the business (see bakenet:eu on 2007-10-29).
The Scottish group, which last December overhauled its board and management, did so on the back of a crash in operating profits from 10,5 million GBP to 5,5 million GBP during FY 2008, the report reveals. Pre-tax profit dropped from 11,4 million GBP to 6.5 million GBP. The report warns of «unprecedented levels of raw material inflation and price volatility», and says fierce competition in the bakery products market had made it impossible to secure meaningful price increases.
The profitability of the business had been significantly impacted, with the operating margin slashed from 12,2 percent to 5,9 percent, and cost reductions hampered by Walkers’ «key differentiator» of using only the finest ingredients. Dividends paid fell from 2,7 million GBP to 1,5 million GBP. Sales grew by 10,6 percent, from 86,3 million GBP to 93,9 million GBP, driven by continuing expansion of the export business which accounts for more than 35 percent of turnover. In Germany consumers find Walkers´ products at MiniMal markets (Rewe Group).
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