North East envelope and packaging producer Encore Group has seen sales and profits rise after a year of investments.
The Washington based business – the 海角视频’s largest independent manufacturer of printed envelopes – has published accounts for the year ended November 2023, showing turnover rose from £49.4m to £55.6m, and operating profit increased from £6.04m to £7.15m. Overall profit for the year, meanwhile, rose from £4.99m to £5.47m.
Recent years have seen strong growth for the Hertburn Industrial Estate company, having increased its market share after acquiring Leeds based Great Northern Envelope Company Limited (GNE) out of administration in February 2018, three years after buying up a 海角视频 subsidiary of Spanish competitor Tompla Envelopes.
Growing demand has led to the business needing more space so, earlier this year, the group snapped up a 103,000sq ft unit in Peterlee, on the site of the former Walkers Crisps distribution centre.
A turnover breakdown within the accounts shows that its envelopes business made up the lion’s share of turnover, accounting for £42.1m, while £13.5m was made through the manufacture of its packaging products. Staff numbers dropped slightly, from 290 to 286 employees.
In the accounts, group CFO Gary Joyce said: “The financial year 2023 was another challenging year for the Encore Group, but ultimately also a fruitful one. Solid turnover growth of almost 13% year on year was achieved largely due to rising prices for product due to the upwards momentum that was being experienced in the price of paper and board, as well as other material components and of course wages.
“In addition to this the group continued to make further inroads into the paperboard packaging market, with a further 26% growth observed for this strategic business unit, following on from 71% growth the year prior, meaning that packaging turnover has more than doubled in just two reporting years since 2021.”
Mr Joyce said the group’s net margin grew by 0.3%, very slightly ahead of turnover, reflecting the mix of work changing due to the further diversification of the business.
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He continued: “Overheads have grown by 14% compared to 2022, partly down to wages growth and paying staff bonuses for their hard work and dedication, but also due to positive moves to grow the business further in the future such as the addition of new machinery and the establishment of another site to provide growth room for the packaging business.”
Investments in the year included the delivery and installation of a printing press and the replacement of the Washington vacuum pumps, which the group committed to in 2022. New investments have also been pledged into a 0.5MW solar PV system at the Washington plant, a new nesting machine and a new e-commerce folder gluer machine, all of which are on order before the year end for delivery this year.
Mr Joyce added: “In the last three financial years the group has committed £8m to business improvement projects – a product of the management team’s policy to reinvest a large proportion of profits to assist with the long-term future of the group.”