SCOTTISH food manufacturer Baxters has posted an after-tax loss of £379,000 for its last financial year, after £5.5 million of exceptional costs relating mainly to restructuring.

Baxters Food Group, which has a product range including soups, pickles, jams and Fray Bentos pies, recorded the loss as turnover surged by 40 per cent to £226 million on the back of its acquisition of US company Wornick, which provides military rations.

Audrey Baxter, who chairs Baxters and also holds the role of chief executive, declared that the results for the year to May 30, 2015 reflected costs relating to the acquisition of Wornick.

However, Ms Baxter signalled that the results for the current financial year would show the benefits of the deal to buy Wornick, which she hailed as “transformational” in terms of the size of the family-owned business. The accounts signal that the consideration paid for Wornick, which was acquired in October 2014, was £87.4m.

Baxters Food Group’s after-tax loss of £379,000 compares with a £23,000 post-tax profit for the year to May 2014, when the company incurred exceptional costs of £7.55m.

Ms Baxter said: “As intimated last year, the acquisition of Wornick into the Baxters family has made a transformational change to the scale of our business.

“While our 2015 results reflect the costs of such a significant acquisition, I am pleased to confirm that our projections for the current year’s trading will more than demonstrate the significant synergies we have made across our global operations. I will be in a position to comment further on our 2016 year-end in the coming months.”

The current financial year, which has about three months to run, will include the first full-year contribution from Wornick.

Ms Baxter highlighted a drive to boost manufacturing “efficiency” in Baxters’ various locations.

The company has manufacturing operations at Fochabers in Moray, where it employs most of its 500 Scottish-based employees and has its head office. Baxters, which has a total core workforce of about 1,500, also has manufacturing operations in Canada, the US, Poland and Australia.

Ms Baxter said: “Through our recent mergers and acquisition activity we now have a number of factories in five distinct manufacturing geographies. It is our intention to undertake a number of initiatives to improve our manufacturing efficiency across our global footprint.”

Baxters Food Group noted that its earnings before interest, tax, depreciation and amortisation (EBITDA) rose to £20.2 million in the year to May 30, 2015, from £15.5m in the prior 12 months.

The company said its pension scheme deficit had increased “significantly” to £6.6m at May 30, 2015, from £2.7m at the prior year-end. It said this rise was primarily the result of the impact the decrease in discount rate assumption had had on its pension scheme liabilities.

The company added that it continued to make additional annual contributions of about £800,000 to the scheme, and increased employer contributions of 15.2 per cent.

Baxters added: “However, the board will continue to monitor this strategy.”

Total directors’ emoluments were £1.36m, down from £1.79m in the prior 12 months.

The remuneration of the highest-paid director was £704,000, down from £899,000 in the previous financial year.

A dividend of £2.014m has been proposed for the year to May 30, 2015, almost the same as the £2.015m payout in respect of the prior 12 months.

Commenting on trading conditions, Ms Baxter said: “A challenge within all our markets is the well-documented movement of consumer food prices. This remains a principal risk to our operations in line with strong consumer demand for product cost promotions.”

Highlighting food price deflation, she added: “We continue to work with all our customers to mitigate these risks that appear unlikely to change in the foreseeable future.”