DRINKS firm Halewood International has seen profits slow significantly.

A combination of events included a rise in raw material costs and outsourcing of bottling requirements while new lines were installed.

Profits before tax last year fell to £1.5m, from £5.2m.

However, the company has continued to invest in product development while also spending considerable sums on promoting leading brands like Lambrini Crabbie’s.

Company founder John Halewood stated: “Within the domestic market, the group has experienced significant price increases in its key raw materials.

“This, combined with operating within a highly competitive market-place, has been a key driver of the profit decline in the domestic business.

“Despite the pressures faced in the UK, the group’s South African subsidiary has continued its strong growth driven by increased volumes.”

The Huyton-based firm experienced a slight rise in turnover, from £224m to £226m, for operations in the UK, South Africa and Romania. It also has an investment in China, where the Tsingtao brand of beer is produced.

Mr Halewood further stated: “The group has invested in internal product development and launched several new products during the year.

“A new £2.4m bottling line was installed and commissioned at the Huyton site to replace three existing lines.

“In order to continue to supply to customers during the tear down, approximately £2m of bottling was outsourced.

“The group continues to operate in a very competitive domestic market. In addition, it is anticipated that the group will continue to experience further significant price increases in raw materials.”

The company has 1,285 employees costing £22.6m in wages and costs. Salary and benefits of the highest-paid director amounted to £659,000.

BARRY TURNBULL