Losses topped £10m at meal replacement brand Huel last year despite surging sales growth.

The plant-based group took a hit to margins as it absorbed soaring global freight costs while attempting to minimise consumer price rises, accounts showed.

Sales jumped 41% in the 12 months to 31 July 2022 to £144.3m, up from £102.7m in the previous year, according to newly filed accounts.

Growth was particularly strong domestically, with sales up 49% to £72.1m. Its push into international markets also saw growth of 31% in the US to £44.6m and 37% in the rest of the world to £27.6m.

Its customer base grew by 22% in the period to 914,000. Average order value was up 11% to £73. However, gross margin fell from 62% to 55% as freight costs spiked.

This was partially mitigated by price hikes in December 2021, but the brand has resisted further price hikes since then to highlight affordability and retain customers.

That led to a loss before tax of £10.6m, up from £0.8m in the previous year and its highest loss since filing full accounts for its 2019 financial year.

Losses were exacerbated by £4m of share-based payments, reflecting its recruitment and increased headcount. It also incurred £2.5m of exceptional costs relating to the £20m fundraising concluded in October 2022, led by Highland Europe.

Constant currency adjusted EBTIDA loss was £1.7m compared with a £2m gain in the previous year.

Huel’s accounts said its action on price was mitigated by higher stock writedowns due to increased stock holding to protect against supply chain issues.

However, the business moved back into EBITDA profitability in the second half of the year after a “challenging” first half.

A Huel spokesman said: “We are proud of our performance, which reflects another year of excellent progress, driven both by new customers buying Huel for the first time, higher average order values as we focused on direct-to-consumer web sales and an ever-growing presence in physical stores.

”Our Hueligan community continues to expand to help drive future growth and we now have 250 employees across our offices in the UK and US.”

“We recently completed a £20m fundraising and have made further operational and financial progress in 2023, leaving us on track to generate positive EBITDA for the year driven by continued revenue growth.”

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