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Castell Howell has posted record revenues as trading recovered from the pandemic. The Carmarthenshire-based food wholesaler, which is headquartered in Cross Hands Food Park, saw its turnover increase by 48% for the financial year ending 31 October 2022.

Its turnover rose from £112m in 2021 to £166m in 2022, as trade rebounded following the effects of the Covid pandemic. While, pre-tax profit increased by 59% to £13.7m despite the effects of supply chain disruptions and rising energy and fuel costs as a result of Russia’s invasion of Ukraine.

Castell Howell said it is currently in a three-year fixed price energy contract which expires in September 2023. Energy contracts for its processing companies, Celtica Foods and Farmfresh cooked meats division, ended in 2021 and have since been exposed to significant increases in energy prices, said the firm.

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It added that it had experienced an “unprecedented impact” on product costs but sales remained strong throughout the summer and into the autumn last year. Despite the loss of the SA Brains business following its acquisition by Marston’s in 2020, unit sales levels recovered to surpass pre-pandemic levels.

At the start of the 2023 financial year, the wholesaler said the short-term outlook looked tougher as its customers in the hospitality sector were squeezed by higher food, labour and energy costs and an expected drop in trade as consumers face their own cost of living challenges. High interest rate rises introduced to combat inflation as well as to business borrowing costs contributed to these challenges.

Finance director Nigel Williams said: “We are now focused on delivering our investment plans of £4.4m this year in renewing and expanding the vehicle fleet and in moving forward over the course of the next two years, with the expansion of the warehousing and processing capacity at Cross Hands and distribution hub in north west Wales.

“Customer demand so far this year, despite the significant challenges faced by the hospitality sector, has remained resilient, supported by the diversity of the customer base, which includes schools and hospitals as well as our core hospitality sector base.

“We expect turnover to approach £200m for the first time this year and for profits to remain stable despite increases in wage costs and continued pressure on gross margins as a result of the inflationary impact on pricing over the past two years.”