The organic veg box company’s operating profits fell by 51.9% from £5.2m to £2.5m in the 12 months to 29 April 2023, according to latest accounts posted at Companies House.
This was partly driven by an anticipated drop in turnover – from £110.8m to £99.6m – following the pandemic-driven spike in sales for delivery box businesses.
The 10.1% fall was compounded by significant and rapid increases in costs in the industry. The business particularly cited living wage increases and the need to ensure it “continued to pay our suppliers [who were also facing soaring cost hikes] fairly”.
“After two Covid-dominated years we all wanted some much-needed stability, [but] regrettably it was not to be,” the accounts read.
However, it took “fast action” following a difficult Q1 – which included work to cut costs and “hard decisions to ensure we remain profitable” – and finished the financial year in “a significantly better position than where we entered it”, Riverford stressed.
“We expected a decline in sales this year, as the trading levels that had been dominated by covid trends for some time settled back down to more ‘realistic’ levels,” said CEO Rob Haward.
“Like many businesses, we faced inflationary cost pressures in the year, which impacted profits,” he added. “But we had a very clear strategy in place which allowed us to manage these challenges, and this has served us well so far in 2023/24.”
Even though sales dropped, they continued to track above pre-Covid levels, its accounts pointed out.
Haward said the company had seen record sales for Christmas 2023 and enjoyed a great start to 2024, meaning “the outlook for the rest of the year ahead is incredibly positive”, he added.
“We have also invested in business process improvements to increase efficiency, enabling us to create higher profits to invest back into the business and into exciting social and environmental projects.”
Riverford has been vocal about the challenges facing the farming sector, launching its #GetFairAboutFarming campaign calling for supermarkets to offer a fairer deal to British farmers.
Central to the campaign is a call to amend the Groceries Supply Code of Practice, to ensure supermarkets are required to buy what they agreed to buy, pay what they agreed to pay, and pay on time, without exception.
This has been debated in parliament as the campaign petition reached over 100,000 signatories.