Swallowfield results show big hike in profits but sliding sales

By Simon Pitman

- Last updated on GMT

Swallowfield results show big hike in profits but sliding sales
Cosmetic and personal care contract manufacturer Swallowfield has reported its latest full year results, showing that adjusted profits were up by 37%, despite a slight drop in sales.

The results for the UK-based manufacturer in the year ending June 2018 showed that adjusted profits before taxation were up to £5.0m compared with £3.6m in the previous year, while revenues for the period declined 3.9%, from £74.3m in 2017, to £71.6m.

 The results were underscored by a strong performance in the company’s Owned Brand business, which showed a hike in sales of 15% over the period, with Brands representing 28% of the total revenues.

Manufacturing business struck by inflation and delays

Executives said that the mainstay manufacturing business was struck by both rising inflation with respect to material costs, as well as delays to three major new contract wins with global brand owners.

Describing the year for the manufacturing business as “challenging”, executives also pointed out that the comparison to the 2017 financial year added to the less favourable picture because there were significant gains during that period.

The company also updated about the Fish Brand, a UK-based men’s grooming brand, which was acquired in February and hos now been fully incorporated into the business and builds on the company’s Owned Brand business.

Future looks bright for Owned Brand business

Newly appointed Chief Executive, Tim Perman stressed his belief that the performance of the company’s Owned Brands business would be crucial for the group in the near future.

"Since taking over the role of CEO in July, I have been impressed by the demonstrated success of the Group's stated strategy leDading to a securing of underlying profitability,”​ Perman said.

“Looking ahead, I see a continuing emphasis on developing the Owned Brands portfolio, supported by a more profitable performance from the Manufacturing business."

What the future might hold

During the course of the past four years, Swallowfield has gradually been changing the focus of its business from being a contract manufacturer to expanding a cosmetic and personal care brand portfolio of its own.

“Over the past 4 years, Swallowfield has successfully transitioned from being a Contract Manufacturer to a company that now generates 65% of its profits from its own portfolio of brands, a strategy that has delivered superior financial returns and gives the Group greater control over its own destiny,” ​said Perman.

“Looking ahead, I see a continuing emphasis on developing the brand portfolio, a greater focus on marketing support for our 'Drive' brands, expansion of our International footprint and extending distribution across both retail and on-line channels.”

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