An acquisition drive led by the fourth gen head of food group Baxters has resulted in profits dropping 61% for the 2013 financial year, ending June last year.
Scottish-based WA Baxter & Sons, the parent company of Baxters, reported pre-tax earnings of just £1.8 million, despite it’s total revenues rising 15% from the previous year to £157 million.
The company’s pre-tax earnings in the 2012 financial year had been £4.6 million, and £7.1 million for 2011.
Baxters has been going through an intense period of acquisitions, but board directors said they would be “activating a significant deleveraging exercise over the next two years, bringing our balance sheet indicators back to a normalised level by the close of our financial year 2014/2015.”
Executive chairwoman Audrey Baxter has been leading a number of acquisitions, including canned meat pie brand Fray Bentos, Australian business Jensen’s Choice Food and UK-based Manor Vinegar.
Baxter, who worked for six years as a merchant banker before joining the family business, led the company’s first ever acquisition in 2001, with the purchase of pickles, chutneys and salad dressings specialist Garner Foods.
Baxter has previously said she aimed to grow Baxters’ revenues to £300 million before 2020.
The company said the 2013 horsemeat scandal, whereby a number of meat products in major UK supermarkets were revealed to contain traces of horsemeat, had created a lack of confidence in suppliers, and resulted in new diligence measures for the industry.
It also said food inflation was above 5%, but consumers were seeking savings.
Last year was also a difficult emotionally for the family, with the death of Baxter’s brother, Michael, and her father, Gordon, who was instrumental in the growth of the family business.
Baxters was founded in 1868, and Baxter is now the sole family member working fulltime in the business. Her brother, Andrew, is employed in the company in a non-executive role.