Independent bakery ingredients manufacturer Macphie has reported a 3.5% growth in turnover to £44.4m. 

The results, to March 2014, have been attributed to “stronger trading across foodservice and food manufacturing channels” as an effect of increasing consumer confidence.

However, the continuation of unsettled raw material prices, particularly in the dairy sector, has impacted on gross margin, which decreased by 5% on the previous year, the company said.

The company has brought all outstanding R&D tax claims up to date over the past 12 months, resulting in an overall positive profit position of £2m.

Alastair Macphie, chairman, said: “The current economic climate will continue to be a challenge, both in the UK and internationally. However, we are pleased to see some positive early signs of recovery. Looking forward we will continue our significant operational capital investment programme and award-winning employee development initiatives, to ensure we remain the vital ingredient for our international customer base.”

In January Macphie moved from his position as chief executive to chairman to focus on longer-term objectives. Andrew Underwood replaced him as chief executive.