Sandwich giant Adelie Foods plummeted to a £28.8m pre-tax loss in the 18 months to 30 September 2017 following the loss of a major supply contract and two factory closures.
The food-to-go supplier fell dramatically in the year-and-a-half after recording a £5.5m profit in the previous 12 month period.
It posted pro-rata sales growth but was impacted by costs as a result of “reconfiguring operations” after losing contracts with Sainsbury’s and WH Smith.
In response to the contract loss the company also decided to close two production facilities, in Leicester and Middlesbrough.
The supplier saw sales increase however, as it recorded £372.3m in sales for the period, a pro-rata 10% increase compared to £225.6m sales in the previous accounting period.
Distribution costs also significantly increased over the period due to investment, jumping from £14.1m in 2015-16 to £36.2m for the 18 month 2016-17 period.
Despite production facility closures the company’s average monthly employee numbers increased by 463 to 2,413, with a pro-rata wage cost increase of 45% compared to 2016.
In recent months Adelie has expanded its distribution capacity, with the launch of a new depot in Cardiff and expansions at two new Haydock and Tamworth sites announced in April 2018.
Since the end of this accounting period the supplier has also announced new contracts with Booker and Caffe Nero, as well as the launch of its Urban Eat brand into c-stores. The company has also said it plans to launch into the hot food market, after it invested significantly into its distribution network.
Adelie was purchased by New Midco Limited, a subsidiary of New Topco Ltd, itself owned by specialist asset manager Internediate Capital Group, in September 2016 from private equity firm HIG Capital.
New Topco Ltd’s group accounts for 13 months to 30 September 17, which includes Adelie and were also published last week, show the group made a £41.8m loss before tax in the period.
An Adelie spokesman said: “The Adelie Foods statutory accounts for the 18-month period ending 30 September 2017 relate to a period of time when the business was being restructured.
“A number of major projects took place during this timeframe, strengthening all aspects of the business on its path to become the preferred choice for consumers and customers in the food to go sector.
“Since then, the company has won and mobilised significant long-term new contracts with major customers and delivered efficiency projects to positively transform the trading performance. These results will be available in our next set of accounts.
“Adelie Foods is trading significantly ahead year-on-year and has a strong pipeline of new business, a large proportion of which is secured but not yet mobilised.”“The company is enhanced and supported by its owners ICG and is in a strong market position with its new product capabilities, current trading performance and new business pipeline.”