Salad bowl and prepared veg supplier Kanes Foods suffered a £12m drop as the pandemic ravaged the food-to-go sector, but is now trading above pre-Covid levels.
Newly filed accounts for the year to 31 March 2021 showed headline sales fell 15.4% from £88.5m to £66.4m “solely owing to the effects of Covid” and the drop in on-the-go eating.
Despite the sales drop, earnings improved overall, aided by new business wins and efficiencies, resulting in its pre-tax loss dropping from £5m to £960k.
The accounts said its bottom line had continued to improve since the start of its new financial year thanks to an “encouraging recovery” in food to go, , while sales growth has returned as lockdown restrictions have eased.
Kanes said it had seen an “encouraging recovery in the most affected categories supplying lunchtime and food-to-go meal occasions” since March.
Together with new business wins and underlying growth with other customers and product lines, the company expects to exceed its pre-Covid 2020 financial year revenues in the current period, while moving back into profit.
However, it did point to “increased competitive pressure within the sector” due to rising underlying inflation driven by packaging and commodity costs as well as “significant” increases in labour costs.
“Recovery and mitigation of inflation are key objectives,” it stated. “Control and recovery of the inflationary pressure in the sector and economy generally represent the most immediate challenge and due to the increasingly competitive landscape, loss of revenue or margin in some areas is likely.
“Notwithstanding this, the company remains confident that net growth in both revenue and profit will be achieved.”
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