TEACAKE maker Tunnock’s has highlighted competitive trading conditions after posting a 10 per cent rise in sales helped by a surge in exports.
Accounts for Thomas Tunnock newly filed at Companies House show the Lanarkshire firm grew turnover by 10 per cent to £58.1 million in the latest financial year, from £52.6m in the preceding period.
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Tunnock’s grew exports by 25% to around £10m after winning a following in markets ranging from Saudi Arabia to Australia over the years.
The company’s octogenarian owner Boyd Tunnock was awarded an MBE 30 years ago in recognition of its success in overseas markets.
Tunnock’s may have benefited from the fall in the pound following the Brexit vote in 2016, which has made products priced in sterling cheaper for overseas buyers.
The accounts for the year ended February 24 2018 cover a period during which Tunnock’s ramped up capacity at its plant in Uddingston to meet worldwide demand for its products, which include caramel logs and wafers.
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In 2016 Tunnock’s commissioned a fourth teacake plant and announced plans for a factory extension.
In a statement issued yesterday the company noted: “A self-funded 20,000 square feet extension to the factory in Uddingston was completed mid 2018 and is fully operational with additional staff recruited.”
Tunnock’s added: “Trading remains very competitive and sincere thanks is given to customers and employees for their continued loyalty and support.”
The company did not elaborate.
However, in the accounts signed off last week, directors signalled confidence in the prospects for the firm, which was founded by Boyd Tunnock’s grandfather in 1890. They said Tunnock’s continues to review the possibility of extending the products in its range.
The company doubled the total dividend paid to shareholders to £2m in the latest year. It provided a boost to the local economy by increasing the average monthly number of employees to 577 from 547.
Tunnock’s recorded £3.8m profits before interest and tax in line with the preceding year. The boardroom paybill increased to £530,646 from £501,437.
In June Boyd Tunnock found himself in the spotlight after he confirmed he had given a Rolls Royce to Glasgow City Council.
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Politicians had criticised the council for accepting the previously anonymous donation amid an increase in nursery fees for parents.
Questions were also raised over any potential conflict of interest as some demanded to know who was behind the gift.
Expressing surprise at the reaction, Mr Tunnock said he wanted the donation to be a good thing but did not want to take credit for it.
“All sorts of important people come to Glasgow and I thought it would be right to give them a nice experience,” he said.
“Glasgow always had a Rolls Royce and I was able to give mine to the city so I thought, why not? I really wanted this to be a good thing, but I didn’t want any credit for it so I asked the city to keep my name quiet, but I’m quite happy for people to know it’s me.”
In 2016 Tunnock’s became embroiled in controversy when it was reported to have removed the lion rampant from its teacakes’ packaging after running a poster campaign for the “Great British Teacake”.
Scottish nationalists called for a boycott of the products.
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Mr Tunnock noted at the time: “We could have said Scottish but you’re then promoting Scotland. We’re British.”
On its website Tunnocks notes that it bought its first teacake robot in 2006 in a move it said was a huge step forward. The company says it achieved a significant increase in productivity after replacing its first caramel log robot with a “shiney new one” in 2015.
UK sales increased by 8%, to £48.1m in the latest financial year.
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