Manufacturing firm Encore Envelopes has seen sales growth of 4% to £28.35m despite operating in a competitive market.
The Washington-based business, which was named as the North East Business Awards 2015 manufacturer of the year in Durham and Wearside, is the UK’s largest independently-owned printed envelope maker.
Together with its sister company Encore Packaging Solutions, the business produces more than one quarter of all UK mail delivered by Royal Mail each year.
Latest accounts for the year ended November 2014 show turnover grew from £27.25m to £28.35m, although pre-tax profits dipped slightly from £1.23m to £921,000 following restructuring costs as a consequence of acquiring Tompla UK during the period.
However, the acquisition of the Spanish rival has also allowed the firm to grow its market share.
Directors said its gross margin fell from 19.1% to 17%, with a consequential 7.4% reduction in gross profit generated, stating: “The reduction in the margin clearly demonstrates the competitive nature of the marketplace in which we operate.
“A reduction in overhead costs has been achieved despite the significant restructuring costs, amortisation and increased turnover.
“Our strategic acquisition of Tompla UK in January 2014 and our continuing investment in new machinery has enabled the company to increase market share and fortify its position as the largest independent manufacturer of printed envelopes in the UK.”
The company has ambitious plans for growth on the horizon and managing director Russell Croisdale said the privately-owned firm was pleased with its performance.
He said: “We are operating in a very competitive market place where volumes have continued to fall, yet we have increased both turnover and market share.
“2014 saw the acquisition of a UK subsidiary of Spanish competitor Tompla Envelopes, with production shifting from Europe to the North East making Encore the largest producer of printed envelopes in the UK and securing the future of our 230 strong Washington workforce.
“What is encouraging is that our underlying net profit for the year is very much in line with the previous year when you strip out the exceptional costs resulting from the takeover.”
2015 will see Encore continue to invest heavily in both its envelope business and its sister packaging business, Encore Packaging Solutions, as the firm expands further into the postal delivery product sector. As part of its investment strategy, Encore’s dedicated packaging division will relocate to larger factory and warehouse facilities this summer.
Mr Croisdale added: “With sales continuing to grow, the time is now right to relocate our packaging business into larger dedicated premises and we are looking forward to unveiling our new facilities this summer. Our ongoing investment will also see us create a number of new jobs in the region as we further grow our workforce to meet increased demands in outputs.”