A Fife-based paper bag supplier which counts McDonald’s, Pret, Burger King and Starbucks among its client base has expressed confidence for the future after a challenging period.
Smith Anderson said its new factory at Kirkcaldy, which officially opened its doors last summer, had provided the business with a strong foundation for growth.
The business is one of Fife’s longest standing with a history spanning back more than 150 years.
The company had been based in Falkland for almost half a century when it decided to invest in a custom-built lean manufacturing site at Kirkcaldy.
The factory now produces more than 60 million paper bags every week.
Accounts newly published at Companies House for the year to September 30 show the firm produced a pre-tax profit of £1.01m, up from £951,313 in the year previous.
The result was achieved on almost flat sales of £20.82m.
Operating profit for the year was significantly ahead of 2014’s £638,066 return at £994,998.
The Courier contacted Smith Anderson for comment on the firm’s current trading position on Wednesday, but no one was available.
In his strategic report to the accounts, chief executive Michael Longstaffe said the firm was starting to see the benefits of operating from its modern site.
“Smith Anderson continues to consolidate its position and success as one of the foremost integrated paper bag manufacturers in the UK,” Mr Longstaffe said.
“Last year saw a substantial increase in the operating profit, up 55.9% from 2014, which is an endorsement of the company’s strategic direction and very rewarding given the business has overcome numerous challenges within the last two years, especially the factory relocation from the historic village of Falkland to the new 140,000 sq ft facility in Kirkcaldy.
“The move provided a significant opportunity to reconfigure the entire production process and design a single storey floor plan creating a lean manufacturing environment.
“This was further consolidated with the completion of a new 2,000-pallet warehouse in July 2015, facilitating the final closure of the Falkland site and ensuring optimum movement of materials across the entire Kirkcaldy site.
“The relocation to Kirkcaldy has undoubtedly provided solid foundations for the company to grow.”
Among the highlights of the year was winning the prestigious ‘three legged stool’ award for outstanding contribution as a supplier to McDonald’s UK.
The contract with the fast food chain is long-standing but the company also picked up new business during the year with organic growth in the domestic market of 3.9%.
However, overseas activity was hampered by unfavourable exchange rates.
Mr Longstaffe said: “This contrasted with the export markets where a strong pound restricted our ability to grow, especially in the Scandinavian market.
“However, we could see this trend reverse if sterling weakens and we actively work on developing our pan-European opportunities.”
The accounts show that Smith Anderson averaged a 184-strong workforce during the year, down slightly on the 193 it was carrying in 2014.
Directors’ remuneration fell from £315,666 to £293,031 in the year.