Tunnocks Tea Cakes

Revenues in 2020/21 were made up of £48.6m generated in the UK, down from £54m the prior year, and £8m internationally, which represented a 23.5% fall

Profits at Scottish brand Tunnock’s have been wiped out as it missed the boom in biscuit sales during the early part of the pandemic, newly filed accounts have revealed.

The business ceased production at its Uddingston factory in South Lanarkshire on 24 March 2020 for six weeks to protect its 600-strong workforce as the UK went into lockdown for the first time.

The facility was reopened once a full risk assessment had been completed and social distancing safeguards put in place.

It resulted in a 12% reduction in revenues to £56.6m and a significant increase in the brand’s costs for the year ended 27 February 2021.

The closure came at a time when locked-down shoppers stocked up on biscuits, with an extra 35 million packs of sweet and savoury biscuits consumed over the year, according to The Grocer’s Top Products Survey [Nielsen 52 w/e 5 September 2020].

Tunnock’s had exceeded £60m in sales for the first time in its 130-year history in the 2018/19 financial year, with the top line rising to £64.5m in 2019/2020.

Revenues in 2020/21 were made up of £48.6m generated in the UK, down from £54m the prior year, and £8m internationally, which represented a 23.5% fall.

Pre-tax profits plummeted from £4.4m to just £255k as a result of the pandemic.

Government support from the coronavirus job retention scheme totalling £1.9m helped cover some of the added labour costs during the closure, 88-year-old boss Boyd Tunnock said in the business review of the Companies House accounts.The business added a top-up contributor to ensure employees were paid 90% of the average wages throughout the factory closure.

Tunnock’s continued to invest in a new plant, which represented capital expenditure of £5.5m in the year.

“This is essential to maintain our position at the forefront of the market,” a spokesman for Tunnock’s said.

“Trading remains competitive, and thanks is given to all customers and employees for their continued support.”

The implementation of Brexit also had an impact on the company during the year, with a subsidiary established in Dublin to comply with consumer labelling regulations.

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