Yeo Valley has bounced back into profitability growth following a major hit to its bottom line last year.
The west country-based producer registered a 72% fall in pre-tax profits last year, from £10.7m to £3m, due to increased one-off costs linked to property disposals and restructuring.
However, the supplier saw pre-tax profits rise by 31.6% to just under £4m for the year to 31 May 2020, according to accounts filed with Companies House for its main business Yeo Valley Production, while profit margins rose from 0.9% to 1.6%. Improved profitability was driven by “wastage improvement initiatives and other operational efficiencies”, Yeo Valley said.
However, it stressed margins were still below the 5% target set by the board. Sales also dipped slightly, by 0.9% to £251.4m, but the business had delivered a “credible performance in a highly competitive market”, and unveiled a host of NPD over the accounting period, including its thickest ever yoghurt, the accounts explained.
The arrival of the pandemic “overshadowed” the supplier’s performance during the final quarter of its financial year, they added. And while sales volumes rose as shoppers “shifted to consuming calories within the home”, the pandemic also resulted in “elevated absence rates” and additional operational costs to implement Covid-safe working environments.
Yeo Valley, which saw retail sales of its yoghurts increase by 5.5% this year to £114.1m [Nielsen 52 w/e 5 September], said it expected the longer-lasting impacts of the pandemic to “continue to impact the way we and many others operate for several months”.
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