Fife manufacturer Smith Anderson has bagged higher profits on the back of strong demand for its paper products in the UK and overseas markets.
Newly published accounts at Companies House show the paper bag maker – which is based at Mitchelston Industrial Estate at Kirkcaldy and counts fast food giant McDonald’s among its blue chip customer base – generated sales of £23.31 million in the year to September 30, a strong uplift from the £21.65m seen in 2016.
Pre-tax profits came in at £527,011, up from the £316,450 of the prior year.
The firm is a significant employer in Fife with 202 workers on its books during the year under review, a figure which has since swelled by a further 18 as the company has reacted to higher demand.
The year saw the group make significant strides in its ambition to increase its sales in overseas markets.
Turnover from operations outwith the UK increased by 44.5% to £2.95m.
“Last year Smith Anderson laid out its primary strategic objectives to develop a talented and highly engaged workforce whilst growing our UK market and increasing presence in Europe, through innovation and service,” chief executive Michael Longstaffe said in his strategic report to the accounts.
“We are very pleased to report the company is on track with its strategic objectives and targets.
“In January 2017 we retained the McDonald’s UK, Holland and Ireland contracts and won an entirely new food service contract for McDonald’s in central and western Europe.
“This has now secured McDonald’s business, worth a turnover of £14m per year.
“Growth into Europe is a major stepping stone for the company and is being cemented with a joint venture partnership in Poland with Huhtamaki, global specialists for packaging in food and drink.
“The partnership will create additional manufacturing bag capacity and provide significant growth opportunities across multiple food service major brands in Europe.”
The accounts show a 50.9% improvement in operating profit to £878,569 and a 182.6% lift to in-group net assets to £2.02m.
“We are pleased to report the company’s financial performance was in line with our strategic plan and we exceeded our budgeted turnover and profit targets for the year,” Mr Longstaffe said.
“We continued to grow in the UK through our food service sector powered through our focus on quality and innovation.
“We continue to invest in our core production capacity.
“Smith Anderson has invested more than £6m over the last five years, including the purchase from America of the latest technology servo-driven, fixed-size bag machine.”
The accounts also show progress with the group’s pension deficit.
The deficit sat at £12.56m at year end, down from £13.7m in the prior year.
The position was helped by a move to merge the group’s two defined benefit schemes, while a review of the investment strategy was also carried out.