Highland Spring Group: Annual Results to 31 December 2023
Company reports strong brand performance and ambition to unlock future growth
Highland Spring Group, leading UK producer of natural source waters, has posted its annual results for year end to 31 December 2023. The business grew its sales in the year by 15.5% to £130.6m as it continues to progress towards its stated ambition of £200m by 2030. Despite facing into a challenging inflationary backdrop, the Highland Spring brand consolidated its position as the UK’s number one plain water brand for a seventh successive year.*
In a year in which the cost-of-living crisis saw volumes across many FMCG categories erode significantly, the natural source waters category showed remarkable resilience with only a small year on year volume decline, despite lapping against record breaking weather in the peak summer trading months in 2022. Retail sales of bottled water rose 9.2% to £1.4 billion with volumes declining only 2.0% to 2.1 billion litres. Plain water showed particular strength compared to 2022 (-0.9%), which represented a 0.9% growth on 2021 levels.
The Highland Spring brand continues to sustain long-term growth maintaining its position as the UK’s number one plain water brand with a retail volume share of 13.0% and UK sales of 379 million litres. Overall, the Group reported total UK sales of over 500 million litres.
A challenging trading environment and inflationary pressures meant the £1.5m improvement in underlying operating profit was eroded by increased finance costs and the full impact of the interest rate hikes being felt resulting in a profit before tax of £900k, down from £1.5m last year.
Building on the strength of the Highland Spring brand continues to be the main priority of the business, with an emphasis on expanding the business’s portfolio of products and
packaging formats to deliver healthy hydration in an environmentally sustainable way.
Last year research and development were undertaken to facilitate a successful launch into the 400 million litres flavoured water category, with a new Highland Spring Flavoured Still Water range introduced in April 2024, which aims to meet consumer demand for great tasting, healthier drinks.
This launch has been supported by a £10 million investment at the Group’s main site in Blackford, Perthshire which will provide circa 25% (100 million litres) of extra growth capability every year.
Environmental sustainability is central to all business activities and a new 7-megawatt,
15-acre solar farm is in development which will provide 20% of the Blackford site’s electricity needs. As part of the Group’s commitment to the local community, a free-of-charge electricity supply will be provided to the local school and a network of EV car chargers for community use.
In January 2023, the Group’s dedicated rail freight facility in Blackford, Perthshire became fully operational. 40% of the water supplied from the main bottling plant in Blackford is now transported by rail, removing 8,000 HGV movements from the roads, and saving over 3,000 tonnes of CO2 every year. This landmark project contributes to the business journey to
reduce near-term carbon emissions by 50% by 2030.
Commenting on the annual results, Simon Oldham, Managing Director of Highland Spring Group said: “We continue to accelerate the evolution of our brand and business acting with agility and flexibility to meet the needs of our customers, partners, and consumers.
I am extremely proud of our healthy performance and focus on driving growth, despite challenging market conditions, which is a testament to our strong, iconic brand and talented teams.
We will continue to take a long-term approach to reshaping the business, growing, and promoting the provenance of the Highland Spring brand, investing in new and innovative product and packaging solutions to create value, whilst working hard to have a positive impact for people, society, and planet.”
*Source: Nielsen IQ volume sales Total Coverage 52 weeks to 30.12.2023.
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