Northumberland family firm Simpsons Malt Limited has seen turnover and profits jump as it built on the benefits of a key acquisition.
The business, which marked 160 years of trading last year, is a fifth-generation family-owned firm that uses 海角视频 barley to produce malt at its bases in Berwick-upon-Tweed and Norfolk. The firm, which has eight sites, has now released financial figures for 2022, which show how operating profits rose 42% to £11.7m, on turnover of £273.8m, which was a rise of 28%.
Pre-tax profits rose to £9.5m and the overall profit for the year was £7.6m, more than double the previous year’s £3.9m. The business, a certified B Corporation which includes agricultural merchanting division McCreath Simpson & Prentice, said the increases followed its acquisition of the grain merchanting business WN Lindsay Ltd in 2021.The additional storage infrastructure means the company collected record volumes of malting barley direct from its increased number of growers.
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Fertiliser values followed energy markets and reached unprecedented highs leading to reduced demand, but Simpsons’ profit margins remained strong. It said that overall, the merchanting division experienced an excellent year with strong demand for all crop inputs and feedstuffs. Within its malting business, it said that distilling malt volumes made up a substantial part of the overall traded volume, with demand remaining resilient in the sector. It said year-on-year growth is expected to continue this year.
The company, which saw its headcount grow from 345 to 366, said demand for brewing malt was steady, albeit slowing slightly as breweries faced increased operating costs. Increased interest costs and higher malting barley values, as a result of the conflict in Ukraine, saw profit margins decline in the final quarter of the year.
During the year the firm invested £4.3m into the business, adding a new grain dryer at its Craigswalls Grain Store in Chirnside, as well as improvements to its power and kilning capacity at its Tweed Valley Maltings headquarters in Berwick-upon-Tweed. It also increased storage capacity at its Tivetshall Maltings in Norfolk and made an £813,000 minority investment in Yaregrain PLC to improve its service and barley storage offering to malting barley growers in Norfolk.
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The company also noted how it could lose more than £1m as a creditor of a firm which went into administration during the financial year. After administrators were appointed to Alexander Inglis and Son Limited (AISL) in May 2021, Simpsons Malt said “it became clear that AISL was unable to fulfil its obligations under the contract of sale to the group. The group’s stock losses in relation to this matter were £1,115,000. The group has not recovered any of its losses and continues to take legal advice on this matter.”
During the year Simpsons Malt bosses also said they helped workers through the cost-of-living crisis by making a £1,000 payment to all full-time colleagues in August 2022. It also donated more than £78,000 to local good causes.
Simpsons Malt Ltd managing director Tim McCreath said: “We’re delighted to be able to report a strong set of financial results, which can be attributed to prudent decision making, careful cost management and a focus on value added trading activities. With the conflict in Ukraine ongoing and through witnessing the impact this has had on both grain and energy values, as a business we remain mindful of how geopolitical events – and other risks and uncertainties – can impact us on a day-to-day basis.
“However, with demand from the distilling sector continuing to grow and the benefits of our vertically integrated supply chain from crop input supply through to malt delivery, prospects for both the malting and agricultural merchanting divisions of the business remain positive.”