The world’s best-known shortbread maker is counting the cost of “one of the most challenging” spells in its 120-year history after soaring butter prices took a 60% bite out of its profits.
Despite export earnings rising 7.5% to £63.4 million in 2017 and turnover increasing 3.2% to £143.1m, pre-tax profits at Aberlour-based Walkers fell to just over £5m.
The figures were revealed in the firm’s accounts for the year to the end of last December. While predicting further challenges, joint managing director, Jim Walker, said he was confident the “solid foundations” of the family-run firm and the “absolute quality” of its brand will see it emerge stronger.
Factors, including falling milk output, bad weather and growing demand for natural fats, saw the international butter price rocket to £6,000 a tonne last summer, from £2,200 in April 2016.
Mr Walker, who shares the MD role with older brother Joseph, said: “The burden this has placed on the company has made this one of the most challenging years in our history and, while the business remains robust, our operating profit fell by 60% to £5.1m.”
Mr Walker added that with the cost of butter expected to rise again and downward pressure on prices in the UK the company would have to “manage costs very carefully.” He continued: “The company is built on a solid foundation. While we expect 2018 will be another difficult year, we are confident our brand’s strength and the geographic spread of our key export markets will enable us to navigate the current head winds and emerge stronger.”
