UK: Simpsons Malt reports fall in sales and profits for 2016

Simpsons Malt has reported a fall in sales and profits for the 2016 year to December as the British maltster shouldered further falls in malting barley prices and lower distilling sales, the Insider reported on September 25.

The group, which also acts as an agricultural merchant in Scotland and the north of England, notes group sales fell 10 per cent in the year to £143.8 million and pre-tax profits were down seven per cent to £9.2 million.

Sales in the UK were down 11.6 per cent to £131.4 million and were down 20 per cent in Asia to £4 million.

In North America sales rose 8.9 per cent to £6.1 million and sales to rest of world more than doubled to £2.2 million.

Simpsons, based in Berwick-upon-Tweed, said the malts business performed “as expected” though against record prior year comparables and a rise in malt sales to brewing failed to offset the decline in distilling.

Malt sales were also down in value terms year on year as a result of a further decline in malting barley prices, which the company said hit sales and profits.

However the group notes the prospects for the malting business “remain positive” despite the distilling market being “relatively flat in response to recent weakness in whisky sales”.

Simpsons notes while whisky sales had shown “positive signs” in the 2016 year, spirit production is expected to lag sales growth.

Brewing continues to grow and the group notes recent investment means it is “well placed” to benefit from the increasingly specialised brewing market.

A new speciality malt production facility is expected to be commissioned in the 2017 year and malt packaging and warehouse was fully commissioned in the 2016 year.

In merchant activities the group notes another “challenging but stable year” as a result of “ongoing pressure on farm net income”.

The group notes: “Cereal values have only seen modest recovery in value, in part due to Brexit, and therefore the prospects within this sector remain challenging.”

Commenting on the 2016 performance, Simpsons Malt managing director, Tim McCreath said: “The group's malting business performed as expected with malt volumes falling short of last year's record performance.

“This was due to a marginal decline in distilling malt volumes not being fully offset by growing brewing volumes.

Malt sales values declined during the year due to further decreases in malting barley prices.

“These factors combined to reduce both turnover and profit before tax.”

The family owned company includes Simpsons Malt, agricultural trading divisions McCreath, Simpson & Prentice, and John Guthrie Ltd.

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