Florette owner Agrial Fresh Produce has reported increased operating losses in the company’s most recent accounts, posted at Companies House.
Agrial saw sales increase by 10.5% to £113.8m as Covid restrictions eased in its 2021 financial year, but margin decreased due to transport problems and labour scarcity.
This resulted in a loss of £8.5m, from a £6.3m loss in the previous accounting period, and an underlying operating loss of £5.8m for the year ending 31 December 2021.
“We haven’t been immune to the challenges facing most other UK businesses in the fmcg industry, but we are very fortunate that our group is supportive of our plans to drive the company forward,” a company spokesman told The Grocer.
The business wrote in its annual report that it had experienced a “rejuvenation of the food sector”, which boosted its turnover. However, Agrial added it suffered from the skills shortfall that has blighted the sector for several years, and saw increased turnover of staff, which affected both productivity and yield.
It also pointed to transportation difficulties including the IR35 regulation changes for drivers, EU nationals returning home, and a backlog of tests for new drivers.
“We have been impacted by increased costs due to the scarcity of labour post-Brexit, which also affected productivity and yields, as skills were harder to retain and training took longer,” the spokesman added. “Transport costs also increased and the transition of salads-to-go products to other sites was slightly disruptive, causing additional expenditure.”
During its reporting period, Agrial moved production from the Salads To Go site at Skelmersdale to two larger sites at Wigan and Lichfield and invested in a new dispatch warehouse.
The company said the team’s hard work meant “issues were improved in 2022, and our performance reverted towards previous levels”.
“We have some exciting plans in the pipeline to help build the brand and mitigate issues caused by a challenging economic climate.”