Bread manufacturer Hovis has reported widening losses whilst continuing discussions about a potential merger with Kingsmill's parent company, newly filed accounts have disclosed.
The company, which is supported by private equity firm Endless, witnessed its pre-tax losses increase from £3.6m to £4.7m during the year ending 28 September, 2024, as reported by .
Fresh filings lodged with Companies House reveal that revenue reached £446.8m over the 12-month period, representing a decline from the previous year's £489m.
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These figures emerge following confirmation in May that Associated British Foods (ABF) had begun discussions to combine its Kingsmill operation with Hovis.
ABF indicated at the time that the negotiations were driven by a "very challenging" marketplace for its offerings.
The previous month saw ABF announce an operating loss for Allied Bakeries, its subsidiary responsible for Kingsmill products.
Hovis battles ‘significant price inflation’
A board-approved statement declared: "The group has achieved positive financial progress despite continued tough trading conditions.
"This is credit to the hard work and dedication of our fantastic Hovis colleagues across our bakeries and distribution centres who ensure our quality and service is unmatched in the market.
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"The group financial results reflect a further increase to EBITDA [Earnings Before Interest, Taxes, Depreciation and Amortisation], despite a reduction in turnover.
"These results highlight our focus on managing the cost base in a highly competitive market and demonstrating good progress during the year which will continue into 2025."
Hovis commented: "Overall bread share remained stable, despite significant price inflation and the on-going cost-of-living crisis."
Allied Bakeries was established in 1935 by Willard Garfield Weston, whereas Hovis originated in 1890 in Stoke-On-Trent.
The bakery led to the formation of ABF. Allied Bakeries amalgamated with Weston Foods in 1939, and the company was renamed Associated British Food in 1960.
ABF boasts an array of brands under its umbrella, including Primark, Twinings Ovaltine, and British Sugar.