Ice cream maker Mackie’s of Scotland has managed to secure its biggest share of the UK market, though its latest accounts reveal the impact of rising costs.

While adding almost half a million customers across England, Wales and Northern Ireland, the Scotland-based firm said its pre-tax profit plunged by almost two-thirds and is forecast to fall further.

The Aberdeenshire business’s chairman Mac Mackie said it had been a “difficult year” for the ice cream sector, as the overall market contracted by 7.4% in the year to the end of May last year.

Record increases in the cost of ingredients, haulage, feed and fertiliser have combined to make the outlook a challenging and unpredictable one, said the company. 

The growth of UK customers outwith its traditional Scottish market and its early adoption of renewable energy has helped it offset these rising cost pressures and to build for the future.

Kantar Worldpanel reported that the Mackie’s customer numbers in England, Wales and Northern Ireland climbed from 939,000 in 2021 to 1,424,000 in 2022. 

Mr Mackie said: “We are putting in place the foundations to be a bigger business and one that is even better equipped for growth in the years ahead. 

“It’s been a pivotal year in our history. We witnessed this encouraging step change in our sales and cut-through south of the border, predominantly as a result of us winning and building on second-line listings for our honeycomb ice cream with a number of supermarkets, including Sainsbury’s.

“We’re thrilled to be reaching new customers and determined to build on the success of these new listings.

“It’s also been a very difficult year due to the scale of the cost increases we have been subject to. While this looks set to continue and worsen, we have robust plans in place to ensure the family business rides out the storm and is here to be successful for generations to come.” 

Pre-tax profit for the year came in at £1.7 million, down 59% on the record £4.1m high of the previous year. Profit in 2020 was £3.5m.

The firm posted revenue of £17.7m, down from £18.5m in 2021 when take-home ice cream sales boomed during the pandemic. Sales were £16.7m in the year to the end of May 2020.

The audited period also saw Mackie’s continuing commitment to investment in the business, notably the culmination of a £4.5m spend into the one of Europe’s most efficient and advanced low carbon refrigeration systems.  

Currently partly operational and set to be fully deployed in the coming weeks, the cooling system will slash the firm’s refrigeration-related energy usage by up to 80% along with its carbon footprint.

It will enable Mackie’s to make more efficient use of its vast renewable energy generation capacity, courtesy of its on-site 7000 panel solar farm, four large-scale turbines and biomass plant, which combined produce twice as much energy as the business uses overall. 

Further investment has seen Mackie’s upgrade its filling machines to significantly increase capacity, while also bringing most of its sauce making in-house with an investment in state-of-the-art machinery, allowing it to purchase the fruit required for its compotes from local farms. 

The programme of investment also encompasses further improvements to its packaging plant as well as the implementation of a market-leading enterprise resource management tool to streamline internal processes.

Newly-appointed managing director, Stuart Common, commented: “Like all businesses we’re facing major challenges resulting from rising costs throughout our operations which has led to careful negotiations with our trade customers while we do our best to manage and absorb increases that may otherwise be passed on to the wider public.

“Despite the restrictions associated with the pandemic, we have maintained export sales of over £2m, which includes increased export to the US, which poses an exciting opportunity for growth. 

“We’ve committed to unprecedented levels of investment into our operations to make us a more efficient and sustainable business as well as being better insulated from some rising costs and position us for further growth.”