The period ended 30 September 2007 has been a year of significant organic growth for the Company. Sales volumes have increased from 363,000 tonnes to 390,000 tonnes in the year, a rise of 7.4%. Turnover has risen from £220.8 million to £261.0 million, a rise of 18.2%. Gross margins have however remained under competitive pressure reducing from31.4% to 29.6% in the year. Profit before interest and tax has increased from £13.7 million to £20.7 million.
During the first three quarters of the financial year prices rose materially, but in the fourth quarter there were signs of a slowdown in demand. Overall price levels remain ahead of the previous peak in 2006 but latterly there is uncertainty in the market. The competitive nature of the stockholding market place continues to prevent the full increase in producer prices being passed on to customers. The impact of this has been seen in reduced gross margins. In addition, in common with all UK businesses, the Company suffered cost and indirect taxation increases ahead of inflation.
The Company made a strategic decision to consolidate its buying and stocking procedures during the year to take better advantage of its buying power and to improve availability through the use of central stock hubs. Stock volumes increased during the year from 77,800 tonnes at 30 September 2006 to 86,800 tonnes at 30 September 2007, a rise of 11.6%. Stock values have increased from £35.3 million to £44.8 million over the same period, a rise of 27.0% which illustrates the impact of price increases during the year.
The Company has generated cash from trading in the year, whilst funding both a significant capital programme and further investment in working capital. Year end fully accounted gearing has fallen to 41.6% compared to 46.0% last year.
In the year to September 2007 dividends totalling 46.0 pence were paid per eligible share compared to 36.5 pence in the prior year.