THOUGH fully expecting a pre-Christmas boost in trade, Isobel Meikle

of the Sugar & Spice novelty cake business was hardly prepared for the

contract that landed on her desk last week.

A major High Street department store has placed an order worth more

than #2m over the next year for her Bathgate company to supply a range

of cakes that will be sold under the chain's brand name.

Not that Mrs Meikle, a hotel manager who founded the firm with her

husband Eric, a chef, was exactly unused to a degree of success.

In only five years the company, which claims to be the first in the UK

to specialise in mini-birthday cakes that carry a personalised message,

has built up a #500,000 turnover.

Originally a spare-time interest, the cakes -- only a couple of inches

in diameter -- were baked in the kitchen of their Edinburgh home. But

word soon spread and the demand justified turning their hobby into a

full-time business.

In 1987 they took over a small unit in Bathgate enterprise zone and

the company now employs 20 people in a 5000 sq ft plant. The latest

contract means that the Meikles now have to find and train another 24

workers within a few months.

''I can't reveal the name of the store though its order, which is for

the more traditional-sized birthday cakes, means that we will have to

work flat-out for the foreseeable future,'' said Mrs Meikle who now

handles the firm's financial affairs.

Around 7000 cakes are turned out every week, most with individual

messages -- covering the usual rude to sentimental range -- hand-painted

on by the staff who usually take around six months to train up to the

required standard.

Rather than being sold in ordinary bakeries, they mostly retail in

card and novelty shops, their rich mix of wedding cake, marzipan and

icing able to last up to six months.

While Scotland, well known for its sweet tooth, remains its best

market, the company's cakes are also distributed throughout the UK in

such stores as Harrods, John Lewis, and British Home Stores. A Dublin

wholesalers has also just signed a supply contract.

The personalising of the product appears to be the secret of its

success and Sugar & Spice provides its outlets with a catalogue from

which customers can choose precisely the decoration they prefer.

Competition from ''imitators'' is growing though the Meikles are

confident their product, which sells for just under #4, is still the

market-leader.

''The recession has hardly affected us at all, perhaps because the

gloomier prospects are, the more our cakes help cheer people up,'' said

Mrs Meikle.

Edible greeting cards are among the latest lines to be launched by the

firm which also benefits from the fact that its products -- unlike

almost everything else in a gift shop -- do not attract VAT because they

are classed as foods.

''They are flour-based thus VAT-exempt, though the Government has

probably already got their eyes on us,'' said Mrs Meikle with a resigned

sigh.