Bosses at North East biscuit maker Northumbrian Fine Foods said the firm will bounce back to profitability this year, having taken a multimillion-pound hit from rising costs.
The Gateshead company has been making biscuits, cookies and other products at its Team Valley base for more than 80 years and has grown to become a 海角视频 leading manufacturer of gluten-free and milk-free biscuits, producing both supermarket own-label and Prewett’s branded products. The company was acquired by French firm Biscuit International in 2018, one of the largest private label biscuit manufacturers in Europe with manufacturing sites in France, Spain, Netherlands, and Portugal, and has seen previous strong growth driven by rising numbers of healthy lifestyle shoppers, as well as a boost within its co-manufacturing business, which led to turnover doubling twice between 2014 and 2021.
Now the firm has issued accounts for 2022, showing a rise in turnover but a drop into the red, through factors it said were beyond its control. Turnover rose from £51.9m to £57.7m, but the previous year’s operating profit of £525,695 was converted to a loss of £5.2m, despite taking action to mitigate the increased costs. The overall loss for the year was £4.7m. Employee numbers rose significantly during the year, from 225 to 266, taking the wages and pensions bill up from £6.7m to £8.6m.
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In the accounts, directors said: “During the year under review, our company experienced a 6% increase in sales volume compared to the previous year, resulting in a total turnover of £57.7m, up from £51.9m in 2021.
“However, 2022 posed challenges due to external economic conditions that were beyond our control. These challenges led to significant cost increases across our entire supply chain. In response, we raised prices to offset these impacts, but unfortunately, we couldn’t fully recover the increased costs in year.
"As a result, we reported a loss of £4.5m in earnings before interest, tax, depreciation, amortization, and exceptional costs (Ebitda), in contrast to the £1.2m profit in 2021. Despite this setback, we remain confident in the resilience of our business model and look forward to a positive turnaround. We expect to return to profitability in the second quarter of 2023.
“Biscuit International has plans to continue to invest in the commercial organisation to aid cross selling, plant and machinery and in the continuous improvement activities which will enable the company to maintain and improve profitability. As we look forward to the coming years the company continues to invest with confidence in further strengthening a capable, established management team; technical and quality, where we continue to raise the bar and standards; training and capability of all staff and staff welfare and engagement.
“The company expects the support of its sister Biscuit International group companies will lead to increased sales of gluten free products into the established group customer base in mainland Europe and around the world.”
Following publication of the accounts, Neil McAndry, managing director at Northumbrian Fine Foods, said: “The whole of the 海角视频 food manufacturing sector faced challenging inflationary pressures in 2022. However, Northumbrian Fine Foods was able to navigate these turbulent times, thanks to our resilience, quality, breadth of range and solid trading relationships. We’re confident to be back to normal for the current business year, as we continue to grow our share of the 海角视频 biscuit market.”