Charlie Bigham’s has topped £100m in sales for the first time while expanding into the DTC market with the acquisition of posh frozen ready meals startup By Ruby.
However, despite an “extraordinary year” in the 12 months to 31 August 2021, the upmarket brand warned of a big hit to margins and profitability in 2022 and beyond amid “unprecedented” cost pressures on all areas of the business
Revenues increased 29.2% – or £23.6m – to a record £104.4m in 2020/21 thanks to a legion of new customers trying the brand’s range of meals and puddings throughout lockdown, according to new accounts at Companies House
EBITDA jumped 30% to £11.3m as a result, with margins improved thanks to volume-driven efficiency improvements in its kitchens, while pre-tax profits rose 47% to £8.1m
CEO Patrick Cairns also pointed to increased distribution in the major mults, well-received NPD, particularly a smoked haddock gratin addition, and further investment in advertising, with a campaign voiced by TV presenter Richard Osman and starring founder Charlie Bigham, for driving growth
Bigham’s – launched in 1996 – has experienced rapid growth in recent years, with sales more than doubling since hitting £48m in the year to 31 August 2016
It has now dipped its toe in the M&A market, snapping up the By Ruby brand to give the business access to the DTC channel.
Leith’s-trained Ruby Bell co-founded the business, which produces hand-made frozen meals from organic and free-range ingredients, with Milly Bagot and Julia Bannister. It makes premium meals similar to the current Bigham’s range, including a classic British fish pie, a Thai red king prawn curry and woodland mushroom risotto
By Ruby raised almost £300k from 191 investors on crowdfunding site Seedrs at the end of 2020, valuing the business at the time at £1.7m
Bigham’s will continue to run By Ruby independently from the main group but with shared benefits from the expertise at the broader business
“By Ruby is a start-up currently at very small scale but will provide access to channels that we are less able to supply with our current chilled offer,” Cairns said
Bigham’s expected sales growth in the low double digits in the just ended FY22, with Cairns warning of “significant pressure” from inflation across a broad range of key inputs
“The cost pressures on all areas of the business – particularly increased utility, labour and raw material costs – are unprecedented,” he added
“We have been measured in how we have passed this cost on to customers and consumers, and this – despite cost saving and efficiency within the business – has significantly impacted margins and profitability.
Sagging consumer demand as shoppers trade down during a recession could also hit the upmarket brand but Cairns predicted any hit would be “relatively small”
“In the economic uncertainty it seems likely that consumers will again eat out less often, and Charlie Bigham’s should benefit from this again as it offers a fantastic quality and great value alternative,” he said
“Many of our consumers don’t buy other ready meals, so we imagine that if there is trading out from the brand it would be toward ‘cook from scratch’ but we haven’t seen any evidence of this.
Bigham’s soared up the top 100 of The Grocer’s Britain’s Biggest Brands earlier this year, moving from 87 to 55 thanks to the extra demand throughout the pandemic. It added another £36.4m (or 31.1%) in value sales to £153.5m, driven by 5.5 million more units passing through supermarket tills.
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