Muntons Annual Review 2016

Muntons Made
Welcome...
to our 2016 annual review. This
year we have focused on malt as an
ingredient used in many foods and
drinks - some you may know, others
you may be surprised to learn!
We hope you will enjoy reading
about what has been a very exciting
and productive year for Muntons.
Do get in touch if we’ve missed
anything or if you’d like to know
more. As ever, there are many news
stories that didn’t quite make it to
the final edit.
Inside
Chairman’s Statement 03
Managing Director’s Report 04
Wishful Drinking 05
Sensational Summer Salad 06
News in Brief 07
Well Worth Waiting For 08
Malty Bits 10
Pure Pleasure By The Pint 12
Technology 14
International News 16
Our Most Decadent Dessert 18
Focus on Education 20
Cutting Edge Laboratory Upgrade
gets Results Fast 22
Muntons Ingredients Overview 23
Muntons Malt Overview 24
Our Year In Numbers 26
GO FIGURE
2016 FINANCIALS IN BRIEF
£11.3M
EBITDA
20.2%
RETURN ON CAPITAL EMPLOYED
£90.33M
TURNOVER
£7.53M
PRE-TAX PROFIT
193,583
TONNES OF MALT SALES
28,197
TONNES OF LIQUID EXTRACT
2.44GWH
ELECTRICITY GENERATED
3,773
SAMPLES SENT TO CUSTOMERS
28,000
SAMPLES ANALYSED IN OUR LABORATORIES
Our results were level with 2015 but we increased our volume sales
by 5%. Overall sales value was slightly down on last year at £90m,
mainly due to a higher proportion of exported sales, and an operating
profit of £8.7m was below last year as depreciation costs and
overheads grew.
The joint venture company in Thailand has been challenged by
commissioning problems and beset by bureaucracy. Had it performed
as projected we would have set another record for the company’s
earnings, but it does give us grounds for optimism this year as the
sales activity begins to grow in South East Asia.
We completed the year with our bank debt down to £23m having
invested £5.7m in the year on capital projects. The completion of
the new barley intake and drying plant at Stowmarket is a major step
forward in the improvement plan for the site. The major overhaul of
our information systems, using SAP S/4Hana has been delayed as we
extended the functionality to be implemented in the first phase and
it will now be live in July 2017.
Although our return on capital is two percentage points lower than
last year, we have been in a period of intense investment and our
forecast returns are delayed on some projects. The anaerobic digester
for example is working extremely well and generating over 14% of
our Stowmarket site electricity requirement but to complete the
project we have struggled to secure the licensing needed for the
recycled waste to be sold on as fertiliser, due to bureaucratic
wrangling between the agencies involved.
In the second half of the year we decided to put our financial audit
out to tender. The successful company was Ipswich-based BDO and
muntons malt -
the key ingredient for success
CHAIRMAN’S STATEMENT
This year under review will go down in history for the referendum decision to leave the European
Union with all its many anticipated consequences. Your company has continued with a clear
strategy to invest for growth and build for the future with projects that will reduce environmental
impact and increase financial performance.
they have now carried out their first audit of this year’s results. Last
year I mentioned that we were obliged to move to a new method of
accounting - FRS102 - and this has been a hugely frustrating task
with no particular benefit to the company or the shareholders.
The executive team under Alan’s guidance have managed the
business very well this year in a landscape of great uncertainty. There
are many questions around the future of our supply chain and our
sales markets, from the continued availability of sufficient barley to
the prospect of export tariffs. As we confront these challenges you
can rely on the whole leadership team to plan and anticipate
effectively.
It goes without saying that this year has been another example of the
successful teamwork which characterises your company. On behalf of
the board I extend thanks to everyone who has worked so hard, in all
areas and countries, to make this another successful year for
Muntons.
The new year has commenced well and we are already seeing steady
improvements in the trading position. We are working well within our
banking facilities and with our positive cash generation are continuing
to assess new projects for 2017 which can enhance sustainability.
Your company has many opportunities for growth and we will
make sure we take them.
Paul Wells, Chairman
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Discover more at: www.muntons.com
Muntons PLC Annual Review 2016