Genius Foods has been rescued with a multimillion-pound bailout from its owner Katjes following another year of losses at the gluten-free bakery.
Katjes, the German confectionery group, has sought to initiate a turnaround at Genius Foods since buying the business in 2022, but has seemingly struggled to make much headway.
In its latest accounts filed this week, Genius’ pre-tax losses hit £3.7m in the year to December 2023, as revenue fell over 5% to £29.6m.
As a result, Katjes was forced to pump in £4m between January 2024 and February 2025, alongside a loan facility for a further £5m, the accounts show. This came on top of £2.8m in shareholder loans provided by Katjes the year before.
Katjes has given written assurances not to recall the outstanding shareholder loans within the next 12 months, Genius said. It also pledged to “provide support to maintain minimum operating cash levels”.
Genius therefore believes it has sufficient cash – “with support from Katjes if necessary” – to meet its liabilities up until March 2026.
Its cash flow was boosted in February with new loans from Shawbrook Bank, although these are conditional on Genius meeting certain profit margin targets.
These assume zero growth and a programme of cost-cutting, Genius said. A 7% fall in planned cashflow could trigger a potential impairment at the company, it added.
Genius Foods’ revenue has steadily declined since 2015 when sales were riding high at over £48m. But amid growing competition in gluten-free breads from the likes of Warburtons and Promise, Genius has struggled to hold ground.
A decision not to boost promotions at an unnamed retailer in 2023 led to a further hit with the supermarket responding by cutting its distribution, the accounts note.
Genius has never posted a profit, except for 2022 when it redeemed £11m in shares from the sale to Katjes. Its losses have regularly exceeded £4m, peaking at £8.6m in 2017.
Inflation, increased marketing spend, and a restructure of the senior leadership team all weighed on profits in 2023, according to the accounts.
Katjes appointed Adam Smart as CEO in April 2023 to lead its efforts to streamline the business and refine the product portfolio. He also oversaw the sales of its Australian business for a net loss of £244k. He lasted less than 18 months and was replaced by Stephen Hann in October.
Under Katjes, Genius is opting to focus primarily on the UK market and said it took steps last year to withdraw from France.
It launched a chocolate brownie in 2024 as its first sweet product and plans to follow this up with another sweet item in the second half of this year.
“The fmcg industry has seen its fair share of turbulence over the last five years, from inflation to supply chain pressures. Despite this in 2023, Genius significantly increased its marketing investment,” said Stephen Hann, CEO.
He added: “2025 is set to be a transformational year for us. Supported by our family-owned majority shareholder, Katjes Greenfood, we are leveraging our founding strengths: innovative, great tasting, gluten-free bakery products that improve lives.”
No comments yet