Dairy firm Graham's sees sales and profits surge

Graham's said the increased cost of raw milk, cream and fuel were "still proving challenging"

New contract wins and significant brand investment have helped to lift sales and profits for Graham's The Family Dairy.

The Stirlingshire-based company report that sales climbed by 21% to £68m in the year to the end of March.

Annual pre-tax profits more than doubled to just over £1m.

However, the company warned it still faced tough trading conditions, with continuing volatility in milk prices and a squeeze on margins.

Managing director Robert Graham said: "A focus on the Graham's brand and understanding the value of our brand has brought great success during this period, however as a business we continue to face tough trading conditions.

"The increased cost of raw milk, cream and fuel are still proving challenging.

"New contract wins and improved internal cost management has led to strong sales growth."

He added: "However our commitment to invest for the long-term in operations, plant and machinery in challenging market conditions means that we are not currently seeing a true return on capital employed."

Expansion drive

The company has been investing heavily in its brand name, including spending a six-figure sum on a TV advertising campaign.

In recent years it has expanded its product range to include butter, cream and ice cream.

The Bridge of Allan-based firm is planning further expansion after being granted a total of £630,000 earlier this year through the Scottish government's Food Processing, Marketing and Co-operation (FPMC) Award.

The cash will help the business to buy a site and install a yoghurt and cottage cheese line in Bridge of Allan and build new lines for semi-skimmed milk processing and low fat spreads in Nairn.