Losses increased at gluten-free bakery Genius Foods in the year of its takeover by German confectionery group Katjes.
Genius Foods’ losses from continuing operations rose from £1.5m to £2.4m in the year to December 2022, amid a “challenging economic environment”, newly filed accounts showed.
The accounts said inflationary pressures, accelerated by the Ukraine war in February 2022, had “significantly impacted the business”. Ingredients, labour, energy and shipping costs were all cited as being substantially up.
Group sales grew 6% in the period to £31.3m, while retail sales bounced back from a 5.6% decline in 2021 to grow by 3.6%.
The group has undergone a strategic refocus since the June 2022 acquisition by Katjes to focus on high-margin, strong market share products in the UK and Europe. It has exited from both its Australia and US businesses, with an MBO for its Australia operations completed during the financial period and an exit from the US in Q3.
The group moved to a statutory profit of £383k from a £3.1m loss, largely as a result of an £11.3m accounting gain on the redemption of preference shares following the sale to Katjes.
Mitigating this gain, the group took a £1.6m restructuring charge, impairments of £2.1m and finance expenses of £5m.
A Genius spokesperson commented: ”Under our new CEO, Adam Smart, Genius has strategically refocused on the UK, exiting the US and Australia, and on its core values of quality and taste, winning multiple Free From Food Awards.
”Our new brand platform, Genius Deliciously Gluten Free, with the largest media investment in the Free From category in 5 years, is driving growth in the UK market. In 2024, our innovative pipeline and enhanced communications plan aims to further reach the 20 million potential gluten-free consumers in the UK.”
Lucinda Bruce-Gardyne founded Genius in 2009 after her son was diagnosed with coeliac disease. Its gluten-free range is stocked by all the mults and across the foodservice channel in the UK and also has a presence in Europe and Australia.
Genuis sales declined in the UK in 2023, according to The Grocer Top Products data, with retail sales falling 1.6% to £11.7m on a 12.2% decline in volumes as Warburtons and Promise gained gluten free market share [Nielsen IQ 52 w/e 10 September 2023].
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