Sales dived 5.2% at healthy snacking brand Graze last year, despite a strong performance from its retail arm.
Retail sales value, as measured by Nielsen, rose 4.8% to £88m across its UK and US operations, but overall revenue fell from £75.8m to £71.8m in the year to 28 February.
Graze said this contrast reflected “the split of revenue… between direct sales and indirect sales”, with supermarket sales growth resulting in a decline in direct to consumer (D2C) business as shoppers accessed the brand in store.
Despite the drop in revenue the company’s losses narrowed, with operating losses down from £2.2m to £1.5m. Graze’s pre-tax losses stood at £13.3m, as the company was impacted by £12m in loan notes, but this still represented a £1.3m improvement on 2017.
In the current financial year, the business has shown “encouraging momentum” and had accelerated sales thanks to 50 new product launches, CEO Anthony Fletcher said.
“We continue to make exciting progress across the business,” he commented. “Revenue growth has accelerated in the current financial year, driven by the transition of our US business to a multichannel model, following the UK’s successful transformation which built on its highly profitable online proposition.
“Our expanded store presence, in terms of number of stores and in-store stock points, is generating good growth and the significant increase in UK and US retail sales is a testament to the success of our unique ‘clicks to bricks’ approach.
“We strengthened our position as the UK’s leading healthy snacking brand which demonstrates our relentless focus on our customers combined with innovative product development to create snacks perfectly matched to evolving consumer tastes.”
The latest accounts come with Graze in the midst of a sale process under Harris Williams. Private equity majority owner Carlyle Group had hoped to complete a sale before the end of 2018, but The Grocer understands the process has slowed down. A buyer is now expected to be found in the new year.
It is understood major trade players Kellogg’s, Unilever and PepsiCo are involved in the process.
Graze, founded by Graham Bosher in 2008, was bought by Carlyle in 2013 for £50m and has rapidly expanded via the retail sales channel.