Milk & More believes it is on course for sustainable growth in 2025 despite a fall in revenue and gross profits, according to its latest set of financial results.
The delivery service, which was acquired by Freshways from Müller UK & Ireland in January 2024, saw revenues fall 13.8% year on year to £121.97m in light of volume contraction and portfolio reshaping, full-year figures to 28 December 2024 have shown.
The business also posted a 9.9% year-on-year drop in gross profit to £77.9m.
However, it recorded a £20.3m improvement in EBITDA, swinging from a loss of £18.4m in 2023 to a £1.9m profit in the first full year of Freshways ownership.
This was achieved in part through cost discipline and system improvements, said Milk & More, which serves hundreds of thousands of customers across the country every week with fresh milk, juices, breads, eggs, yoghurts, fruit & veg and other grocery staples.
The accounts also showed a rise in gross margin from 61% to 63.8% over the same period – vertical integration with Freshways had resulted in a £13.5m reduction in direct costs (logistics, fuel, vehicles, staff), a £15m decrease in overheads, and investment in new routing, CRM and EV fleet optimisation.
Since taking ownership, Freshways has radically overhauled Milk & More, which previously sourced products from artisan brands and via partnerships with upmarket suppliers such as Daylesford Organic.
It now supplies more mainstream labels, including Cathedral City, Country Life, Lurpak and Clover, and has also reduced its refill offering.
Read more: Milk & More reports fruit & veg surge as customers avoid plastic packaging
In addition, Milk & More has successfully halted customer decline and returned to growth after “nine months of sustained effort”, according to the financial statement.
As of year-end 2024, Milk & More had added approximately 2,000 new customers per week, driven by the introduction of a canvassing team of over 100 door-to-door salespeople, which it described as a “key investment in revitalising customer acquisition” and “expanding the brand’s reach”.
“FY24 was a foundational turnaround year under new ownership,” concluded the director’s report.
“The management team delivered substantial cost reductions, reversed EBITDA performance, and stabilised operations.
“Its owners take confidence in the sharp trajectory improvement and look forward to the continued execution of a credible and disciplined transformation plan.”
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