Mackie’s of Scotland has reported a profit before tax of £1.7m, 59% down on the record high of £4.1m last year, with profits forecast to fall further in light of steep cost increases.
The Aberdeenshire-based ice cream maker also posted revenue of £17.7m for the year ending 31 May 2022, with revenue since rebounding due to strong sales and levels of turnover rivalling previous records.
Record increases in the cost of ingredients, haulage, feed and fertiliser have combined to make the outlook a "challenging and unpredictable" one, according to a statement.
The figures come as Mackie’s achieved its highest ever UK market share, adding almost half a million customers across England, Wales and Northern Ireland. Kantar Worldpanel reported that customer numbers there climbed from 939,000 in 2021 to 1.42 million in 2022.
This came despite a tough time in the ice cream sector, as the overall market contracted by 7.4% over the same period.
Mackie’s says the growth of UK customers outwith its traditional Scottish market and its early adoption of renewable energy has helped it offset rising cost pressures.
Executive chair Mac Mackie - one of three family owners of the business - said: “It’s been a very difficult year due to the scale of the cost increases we have been subject to.
“While this looks set to continue and worsen, we have robust plans in place to ensure the family business rides out the storm and is here to be successful for generations to come.”
The audited period also saw Mackie’s continuing commitment to investment being made back into the business, most notably the culmination of a £4.5m spend on one of Europe’s most advanced refrigeration systems.
Currently partly operational and set to be fully deployed in the coming weeks, the cooling system should slash the firm’s refrigeration-related energy usage by up to 80%, along with its carbon footprint.
This will enable Mackie’s to make more efficient use of its vast renewable energy generation capacity, courtesy of its on-site 7,000-panel solar farm, four large-scale turbines and biomass plant, which combined produce twice as much energy as the business uses overall.
Further investment has seen Mackie’s upgrade its filling machines to significantly increase capacity, while also bringing most of its sauce making in-house with an investment in machinery, allowing it to purchase the fruit required for its compotes from local farms.
The programme of investment also encompasses further improvements to its packaging plant as well as the implementation of an enterprise resource management tool to streamline internal processes.
Newly-appointed managing director Stuart Common commented: “Like all businesses we’re facing major challenges resulting from rising costs throughout our operations, which has led to careful negotiations with our trade customers, while we do our best to manage and absorb increases that may otherwise be passed on to the wider public.
“Despite the restrictions associated with the pandemic, we have maintained export sales of over £2m, which includes increased export to the US, which poses an exciting opportunity for growth.
“We’ve committed to unprecedented levels of investment into our operations to make us a more efficient and sustainable business, as well as being better insulated from some rising costs and position us for further future growth.
“I believe that our long-term strategy of doing right by the planet and investing so significantly in renewable energy is now giving us the tools to create a competitive advantage, allowing us to continue to offer shoppers a premium dairy product at what we think is an affordable price, particularly when compared to many other premium products in the market which have had to rise higher and faster.“
He added: “Our sustainable investments are now paying dividends by helping us to overcome this challenging period, expand our market presence and boost our contribution to the local and national economy over the years ahead.”
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