Dundee-based wholesale and retail food distribution group CJ Lang & Son suffered a further profits squeeze last year but insisted the outlook for the business was positive.
New accounts published at Companies House yesterday show the SPAR convenience store supplier – which has its headquarters in the city’s Longtown Road – posted a £1.26 million pre-tax profit in the year to April 30.
The figure was down from £1.98m achieved by Lang’s a year earlier, and from the £5.49m booked in 2011.
Lang’s said the dip was due to a combination of factors including continuing pressure on disposable incomes and an increase in competition in the convenience store sector.
“Whilst we are able to report an increase in the number of stores supplied, the year under review was as challenging as had been anticipated,” the directors’ stated in the report to the accounts
“Household disposable incomes continue to be squeezed, leading consumers to exercise more discretion with spending on food, which has contributed to a suppression of both turnover and margins.
“We have also seen a further increase in new competition in our sector, which adversely impaced on footfall and income generation in stores.
“The resultant drop in gross profit was partly mitigated by cost reduction initiatives, which will increasingly become a key element of our strategy.
However, despite the dip in profits, Lang’s said it was confident about trading prospects for the current 2013/14 financial year and said it was investing a significant multi-million pound sum in the trading estate and in upgrading its operations.
“The balance sheet remains extremely strong, enabling the group to embark on a £6.1 million capital expenditure programme during 2013/14,” the company stated.
“The focus of this substantial investment will be on improving efficiency in distribution, energy and IT, but crucially provision is also made for our SPAR company store estate to grow further.
“The future trading outlook remains positive despite a backdrop of continuing weak consumer confidence and more competition emerging.
“Recruitment of independent retailers into SPAR is at its most buoyant for some time, as is business investment by existing customers, whilst an impactful SPAR national media campaign scheduled for the year ahead is expected to provide a very positive stimulus to the brand.”
Total employee numbers within the group remained stable at 2,081 in the year to April, with 1,719 staff working within the firm’s retail stores and a further 362 people in management, administration and distribution roles.
Total staff costs came in at £24.89m for the year, down from £25,43m in 2012. The remuneration of the group’s directors fell from £1.37m in 2012 to £1.17m with the highest paid director recevieing emoluments of £512,000, down from £599,000 the previous year.
The company – which has been trading under its current name since 1934 – remains family owned with chairman Joan Scott-Adie holding a 51.1% stake in the issued share capital and other members of the Scott-Adie family – including deputy chairman John Scott-Adie – controlling a further 47.6%.