Berwick-upon-Tweed independent maltster Simpsons Malt said its 2016 profit before tax slipped to £9.3 million from £9.9 million with turnover sliding to £143.8 million from £160.7 million as the firm continued to invest heavily in the business.
During 2016, the group’s capital expenditure was £6.62 million.
The family-owned company that includes agricultural trading divisions McCreath, Simpson & Prentice (MSP), and John Guthrie Ltd, credited a positive end of year mainly on “increasing opportunities within the global brewing industry and continuing demand from distilling customers.”
Simpsons Malt is headquartered in Berwick-upon-Tweed with another malting plant at Tivetshall St Margaret in Norfolk.
Simpsons Malt managing director Tim McCreath said: “The group’s malting business performed as expected with malt volumes falling short of last year’s record performance.
“This was due to a marginal decline in distilling malt volumes not being fully offset by growing brewing volumes.
“Malt sales values declined during the year due to further decreases in malting barley prices.
“These factors combined to reduce both turnover and profit before tax.
“The prospects for our malting business remain extremely positive.
“Distilling markets are relatively flat in response to recent weakness in whisky sales.
“However, whisky sales in 2016 have shown positive signs and whilst spirit production is expected to lag this sales growth, the long-term opportunities for this sector remain positive.
“Brewing opportunities continue to grow and we are well placed, through our recent investments and quality of malt, to benefit from a rapidly changing and increasingly specialised global brewing market.”
Commenting on the performance of the group’s merchanting divisions, MSP and John Guthrie Ltd, McCreath said: “MSP and John Guthrie have experienced a challenging year as a result of tightened profit margins in the agricultural sector.
“However, they continue to stand firm, in an industry facing ongoing pressure on farm net income.
“Cereal values have only seen a modest recovery in value and therefore the prospects within this sector remain challenging.
“However, our high standards of grower service and our sustainable approach to malting barley procurement leaves us well placed to manage this challenge.”
McCreath concluded: “We are incredibly positive for the future of Simpsons Malt, and will continue to invest heavily in the business and our people to ensure we continue to be world leaders in our industry.
“With further investment in speciality malt production facilities expected to be commissioned in 2017, we will continue to lead by quality and innovation, for future success.”