US spices and sauce giant McCormick saw a 6.6% uplift in sales from its UK division last year, although the proportion of its sales booked in the UK fell back.
The overall turnover from McCormick (UK) ltd, which owns the Schwartz brand of spices, rose 6.6% to £236m in the year to 30 November 2015.
McCormick signalled its intent to grow its presence in the UK and Europe with its ultimately failed pursuit of Premier Foods earlier this year. McCormick said the deal would have “significantly” increased its presence in “a large grocery retail market”.
However, these new accounts show its sales into the UK market fell by 16.5% to £123.3m from £147.7m last year. Meanwhile, non UK-sourced revenues leapt by 53% to £112.7m during the period.
McCormick told The Grocer this was due to sales from its industrial division being reclassified as non-UK income rather than any slowdown in the UK market.
McCormick has been growing its presence in Europe and the widen EMEA region with the acquisition of Italian spices business Drogheria & Alimentari for €85M in early 2015 and the construction of a factory in the Middle East to serve its “high potential” industrial market.
Overall pre-tax profit was up 85% to £16.6m, though this translated to a post-tax profit down 31% to £9.8m in 2015 due to a £6.8m tax charge in the year compared to a tax credit of £5.3m in the previous year.
McCormick said the improvement in operational profitability came “despite the economic conditions and competition” it faced.
The US food and sauces firm said higher commodity costs in its herb and spice portfolio were mitigated by productivity improvements and favourable currency movements.
It added it invested in its Schwartz and Thai Kitchens brands during the year, with increased marketing spend.
Its industrial division had a “very strong year”, driven by new and existing products and a focus on cost reduction and pricing.
“The directors believe that the company is well placed going into the new financial year, with continued focus on higher margin products and maximising efficiencies across the business driving further growth in operating profitability in future years,” the accounts stated.
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