KeyStore growth keeps Filshill upbeat

Simon Hannah

Growth of its KeyStore convenience store brand, tight cost controls across the business and a good performance by its international division saw the independent Glasgow-based food and drink wholesaler JW Filshill record pre-tax profits of £0.9m in the year to 31st January 2016 with the company pointing to a “satisfactory” performance in a challenging marketplace.

Filshill saw turnover for the year reduce 5.8% to £143m, reflecting the market-wide trends that are seeing tobacco sales continue to fall and price deflation evident in many product categories. However, turnover of grocery and impulse categories grew during the year and helped improve gross margin from 6.7% to 6.8%.

The company, which marked its 140th anniversary last year by rebranding and launching a new community-based marketing campaign, made a number of key business development, sales and marketing appointments as well as ramping up investment in IT and logistics in order to improve efficiencies. A new fascia for top-end KeyStore retailers will be rolled out this autumn.

An upbeat Simon Hannah (pictured), Filshill’s Managing Director, said: “The market remains highly competitive but we are well positioned to take advantage of the opportunities we are creating and to return to revenue growth.”

Export sales via JW Filshill International, which supplies craft beer, spirits and other products to markets including Asia-Pacific, are continuing to expand in line with expectations, he added.

Investment

“Cost control continues to be a key focus for the business although wage costs have risen as we continue to support and invest in our workforce,” Hannah said. “Investment has been made in our business development and marketing teams, and a refocus on health and safety commenced during the year. Capital investment included IT systems, company vehicles and equipment.”

Hannah said the firm would seek to manage the principal risk of losing customers in a highly competitive independent retail sector by offering strong promotions plus wide-ranging advice and support, including IT, marketing and social media expertise, to its retail customers across Scotland and the north of England.

Forging closer relationships with key suppliers, he added, was also crucial. “The group works hard to offset this by maintaining strong partner-based relationships with all our suppliers,” Hannah continued. “We were recently ranked number one by suppliers in an independent survey across our key competitors.”

Pointing to Filshill’s strong balance sheet, showing net assets of approximately £14m, 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.”

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