Historic family firm Ringtons has toasted a rise in revenues and continued profitability, as customers carry on stocking up on its teas and treats.
But the Newcastle business – famed for its doorstep delivery service around the UK – has warned that increasing costs are impacting current trading. Established in 1907, Byker-based Ringtons imports and packs tea for a host of private customers including major supermarkets, while also selling its own range products in shops, online and through its fleet of 229 traditional delivery vans.
Having navigated the pandemic, aided by customers buying Ringtons goodies to keep them going through lockdown, the company has now issued accounts for the year ended June 2022 which continue to show strong trading. Turnover rose 8.3% at the business, from £65.2m to £70.6m, and operating profit dropped just 0.4% from £4.59m to £4.57m, driven by a mix of higher volume sales and higher retail prices across most of its products. Total shareholders’ funds rose by the year end from £29.6m to £31.5m.
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CEO Simon Smith said the company, which employed 555 people in the financial year, had a strong Christmas period for its tea packing and doorstep divisions, with its tinned biscuits, chocolates, hampers, teas, coffees and other gifts virtually selling out. He said a key factor was Ringtons maintaining prices for 40% of its products at the same price as the previous Christmas.
Meanwhile its beverages and coffee division – which supplies drinks and machines to the leisure sector and is headed up by Stephen Drysdale – fared very well during the year, driven by the reopening of the hospitality sector. The divison has also now installed a much bigger roaster, an investment which was delayed because of Covid restrictions.
Mr Smith said: “We expect our coffee and beverages business to grow faster than anything else. We’ve found that because of the way we handled Covid, being flexible with our customers in terms of supporting them financially with payment structures to make sure they survive - that’s really come back. They respect what we tried to do.”
Internet sales slowed down in the year, as shopping habits returned post-Covid, but Mr Smith said he expects to see more growth in the future via more marketing activities, which are being overseen by the fifth generation of the family, which has been working in the business since late 2021.
Mr Smith said Ringtons had worked hard not to pass on the full extent of price increases to customers – and said the increases came ‘thick and fast’. In the current year, and looking ahead, he said trading had been more difficult.
He said: “We are profitable, there are a lot of companies that aren’t. We remain profitable because of the nature of the business and our family approach - we’ve got money aside for rainy days which is why we were able to cope with Covid.
“We have put our prices up across the board but have tried our best to keep the increases as low as possible to continue to offer value for money. In terms of costs overall we’re topping out at 20%-plus. Tea has suffered from container price increases, the exchange rate fluctuations – particularly since Liz Truss’s session on economics – that was devastating for us for a while. All the packaging prices, from foil to tea bag paper, to cartons, to outers, along with distribution have gone up substantially.
“Price increases are tough, because of our customer profiles and also because we deal with all of the high street retailers, which is difficult, but they have all been extremely supportive.
“Cost increases came thick and fast and the normal conditions you expect, with warnings – we can only put up our prices to our big customers in 12 weeks after notification – they came much faster. You have to be prepared, you have to be ready and you have to predict what your prices are going to be.”
He added: “This year has been more difficult. We’ve had a much bigger hit with the cost increases, inflation, cost-of-living crisis, people recruitment – it’s been much more difficult in both divisions. Our sales next year will probably be up, but profitability will be down somewhat, for the same reasons as everybody else’s. You can’t keep on top of all the price increases coming through and we want to remain good value for money.
“We’re just being realistic. We’re not worried about it. The fifth generation is 'futurising' the business and we’re all very confident it’s going to work out.”
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