GOLDEN Casket (Greenock), the confectionery company owned by veteran businessman Douglas Rae, has signalled plans to ramp up its manufacturing output, as new accounts show it lifted turnover to nearly £21 million in its latest financial year.
The company behind the Millions and Buchanan’s brands said it will take steps to increase production after being unable to find a takeover target.
Its plans are revealed in accounts newly filed at Companies House, which show that profits at the confectionery business narrowed to £691,355 from £701,174 the year before.
Mr Rae, whose Golden Casket company is the majority shareholder of Greenock Morton Football Club, indicated that the business was pursuing a new expansion strategy, after attempts in recent years to identify acquisition targets failed to come to pass.
Mr Rae said: “Despite strenuous efforts having been made the company has been unable to locate a suitable company for takeover.
“In view of this disappointing aspect we have decided to increase our own manufacturing output which will need additional plant and machinery to achieve the increase.
“No date has been set as yet to make this directional change although it is likely that changes will occur during 2015.
“It is hoped that turnover will increase in 2015 despite the company operating in difficult trading conditions.”
The accounts show that Golden Casket lifted turnover to £20.9m last year from £19.6m in 2013.
Mr Rae, who is chairman of Morton FC, used the accounts to highlight the market dynamics caused by the rise of discounters, such as Aldi and Lidl, in the grocery sector.
He said: “The year 2014 was a satisfactory trading for the company in that it mirrored the performance of 2013 despite changed trading conditions.
“The multiple groups increased their profit margins in 2014 because of the competition generated by the discounters who have been increasing their business share considerably.
“The company’s profit before tax amounted to £691,000 compared with £701,000 in 2013, while the capital involved, as shown in the consolidated accounts, amounted to £13.5m compared with £13.25 in 2013.”
Having initially focused on supplying the independent retail sector, Golden Casket has been switching its attention to the major supermarkets. That was noted by Mr Rae in remarks on the company’s accounts last year, when he hinted at increasing capacity and expanding its range to meet the multiples’ needs.
Writing in the 2014 accounts, Mr Rae noted that the continued contraction of the independent scene is “disappointing”.
He said: “The private sector which has always been our target grouping continues to shrink which is very disappointing. It is for that reason that we are now targeting the multiple groups who are looking for higher margins because of the demands of the public to get price reductions.”
Golden Casket paid dividends of £46,020 during the year, compared with £99,600 during the prior year, the accounts show.
Taking into account the results of Greenock Morton, the consolidated accounts for Golden Casket show that pre-tax profits for the group narrowed by 14 per cent to £370,362.
Those accounts show that turnover grew to £21.7m from £20.5m.
The group employed an average of 78 staff across confectionery and football operations in 2014, down from 81 the year before, while the number directly employed in the confectionery was down by one to 44.
Staff costs for the confectionery business was broadly unchanged at £1.5m, while taking football into account the costs were fell slightly to £2.26m from £2.32m in 2013.
An analysis of turnover shows that revenue posted by Morton dropped to £778,273 from £846,070.
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