Soaring commodity prices eating into margins
LEES Foods has warned half year profits are likely to be down despite posting record sales.
The Coatbridge-based bakery and sweet maker said sales for the six months to June 30 were £10.22 million compared to £9.62 million last year.
Demand for goods has been particularly strong with Scottish sales now at record levels.
However soaring commodity prices are hitting profits with the cost of key ingredients such as coconut, which is used to make 50 million snowball cakes each year, remaining high.
The group - made up of macaroon maker Lees of Scotland and ice-cream cone manufacturer Waverley Bakery has responded by raising prices and reducing packaging.
In a market update posted today, Lees said: "Commodity prices remain high, although as reported in May the company has been successful in taking steps to mitigate these.
"There has been a natural time lag in this process which means pre-tax profits for the first six months are likely to be lower than last year, however, the company remains optimistic in respect of the second half of the year and is confident of achieving current market forecasts for the full year."