EDINBURGH-BASED conglomerate The Wemyss Development Company hiked profits by nearly 70 per cent to £8.6 million in its latest financial year, after a major price rise boosted its tea plantation business in Kenya.
Wemyss highlighted progress made by its tea, property, farming, wine and spirits divisions, which operate in the UK, Australia, Kenya and France, as group turnover rose by £31.4m from £24.4m in the year ended March 31.
Profits at family-owned Wemyss jumped by more than £3m, with accounts newly available at Companies House showing a big lift in group operating profit to more than £7m, up from £4.2m the year before.
Wemyss, whose roots as a family business stretch back more than 450 years, earns the bulk of its revenue overseas and saw turnover in Africa soar to £20.2m from £15.6m last time. That came amid a strong performance by Sotik, its tea plantation business in Kenya, which is the bedrock of the business.
“Sotik enjoyed a strong year with tea prices up 44 per cent,” the directors note in their review of the accounts. “The average US$ price was up 27 per cent with the rest of the increase coming from the depreciation of the Kenya Shilling on the previous years.”
While “prolonged drought” meant tea volumes were down by eight per cent compared with its previous financial year, Wemyss said its two factories were operating at near full capacity over the period and signalled that it has set funds aside to add a third line in the Sotik Highlands in the near future.
“Additional funds are also being retained while the Appeal Court rules on a retrospective collective bargaining agreement with the Unions,” the directors added.
“The initial award was twice the sum provided by the Growers Association.”
Beyond Kenya, Wemyss pointed to “another very strong year” at its avocado and farming operations in Australia, including a “strong contribution” by its related packaging business, APMS. That was in spite of revenue in Australia falling back to £3m from £3.8m.
“Turnover at Fonty’s Poll was up 70 per cent due a strong harvest and firm prices which can be attributed to both an increase in demand domestically, but also a poor harvest in New Zealand leading to a fall in supply,” the directors state.
While the directors “caution against another repeat performance” in the current year due to the cyclical nature of the avocado crop, they signalled their confidence in the prospects for the business. This stems from moves to boost production capacity, rising demand for avocados in Australia, export opportunities and the development of “by-products such as baby food and smoothies”.
The directors hailed the progress made by its farm in Australia, despite making a loss which it put down to the deferral of some grain sales until next year.
In the UK, Wemyss said its property division sold the majority of the 18 units it had developed in Glasgow off plan in the last quarter of 2015. It is poised to start work on the largest project undertaken by its division, a 26-unit development in Edinburgh, but noted that the start date had been delayed.
Elsewhere, Wemyss reported a 33 per cent increase in sales at Wemyss Vintage Malts, its luxury Scotch whisky business. The company said it was committed to supporting the Fife-based Kingsbarns distillery, a related business, by providing funding on an arm’s length basis in its early years. They said this would help safeguard future supplies for Wemyss Vintage Malts. Kingbarns will release its first malt in 2018.
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