Continued development of its core delivered wholesale business coupled with growth of its craft beers and spirits business and international division helped JW Filshill record an increased operating profit of £1.1m in the year to January 31, 2017 against £0.9m in the previous financial year despite a 0.5% fall in turnover to £142m.
Trading in an independent retail trade that remains “highly competitive and challenging”, Filshill’s strong performance in its food and drink business offset the continuing decline in tobacco sales with this change in the mix of business helping to deliver a 0.6% uplift in gross profit percentage, up 8% on 2016.
Filshill, which supplies 175 KeyStore outlets across Scotland and the north of England, continued to operate tight cost controls across the business while investing in key resources in IT, data analysis, marketing, and health and safety.
The company’s capital investment, part of a long-term strategy, included new vehicles and extending its Hillington office complex to accommodate an expanding workforce and training facilities.
Managing Director Simon Hannah (pictured) said: “Our market is evolving with further changes to tobacco sales regulations likely to drive the same trend for coming years, forcing convenience operators to focus more heavily on growth areas such as local sourcing, food to go, and fresh and chilled foods.
“We have ramped up investment in our workforce to enable us to engage more closely with our KeyStore customers and manage the principal risk of losing customers to other groups by offering strong promotions and wide-ranging advice and support, including store layouts/planograms, consumer leaflets, digital social media and Epos till installations.”
The group’s international division, which exports craft beer, craft spirits and other grocery products to the rest of the world, Asia-Pacific in particular, continued to grow. “We are pleased to see our international business starting to generate profit,” said Hannah. “The markets we operate in remain highly competitive but we are well positioned to take advantage of the opportunities we are creating.”
Hannah said that a detailed strategy planning exercise during the year to define the company’s future vision and create a framework for focusing activity and decision-making processes had been completed.
He said: “This has been a crucial step-change for us as the communication of who we are and what we stand for throughout our ‘family’ of customers, employees, suppliers and local communities will ensure that we operate within a fully-engaged community of stakeholders and puts delivering ‘Service Excellence’ at the heart of everything we work to achieve.”
An ownership succession plan has also been implemented to ensure that succession to the next generation of the family happens in a “positive, structured and organised manner”, Hannah confirmed. “This will help to secure the long-term future of the business and will provide stability and clarity to all of our stakeholders.”
Pointing to Filshill’s balance sheet, showing net assets of £11.7m, Hannah said: “We’re in a strong position given current market conditions and while we continue to measure revenue, gross margin and operating profit as key financial indicators we also monitor non-financial KPIs including staff performance, vehicle fuel performance, sales service levels/range achievements, unanswered telesales call, returned orders and early warning date codes as part of our business performance review.”
