• Profit flat
  • Margins dip to 7.2%
  • Turnover up 12.1%

UK biscuit and cake maker Walkers Shortbread reported a dip in margins and flat profits for 2011 and warned margins may weaken further.

The Scotland-based firm reported profit of GBP8.9m (US$14.4m) for the year to the end of December 2011, unchanged from the year before.

Margins dipped to 7.2% from 8.5%, which the firm blamed on rising ingredients prices. Walkers conceded there had been some recent "respite in commodity prices", which it said should improve 2012 profits, but warned that it expected margins to weaken further and remain at "historically depressed levels for some time to come".

Sales, however, climbed 12.1% to GBP119.1m. While domestic sales account for the majority of business last year, the proportion derived from exports held steady at 41% of total sales in 2010 and 2011, Walkers said.

The firm said it had grown its business in China and Japan, complementing its "strong foothold" in Australia, Canada and the US.