Pre-tax profits at Highland Spring fell by more than £1.5 million last year despite the Perthshire drinks company taking over as the UK’s No 1 bottled water brand.
The ousting of Evian from the top spot the first time in history that a British produced brand has been the most popular in its home market came after the Blackford company increased production volumes by more than 10% to 403.8 million litres, more than a fifth of the total UK packaged water market by volume.
Accounts for the year to December 31 published at Companies House showed turnover increased by more than £6.6 million in 2012 to £86.4m.
Pre-tax profits in the period fell to £2.95m from £4.49m in 2011.
“In common with most food and drink manufacturers in the UK during 2012, the group experienced sustained pressures on net profit margins in a fierce trading environment,” the directors said in their report.
“Continued demand by consumers for sustained value in their grocery shopping required the group to trade extremely keenly in the marketplace with major customers, notably the major grocery multiples and national cash and carry wholesale customers.
“In addition, in order to drive growth in sales turnover, there was a requirementto increase promotional investment throughout the year. This achieved a strong sales turnover performance but clearly impacted net profit margins adversely.”
During 2012 the company employed 404 staff with more than 300 people involved in the production of the various bottled waters produced by the company.
The group payroll edged marginally ahead to £12.73m from £12.45m, while the highest paid director received moluments of £302,000, an increase of £25,000 on the year previous.
Highland Spring Group chief executive Les Montgomery last night said the company had enjoyed strong recent trading trends and added that he was confident for the future.
“We had a remarkable summer and in June and July we achieved the highest ever turnover for two consecutive months in the history of the company,” he said.