Losses continued to mount at pork giant Karro Food Group in its first full year under CapVest ownership as Brexit-related inflation, weak pork markets and one-off charges sent it further into the red.
Newly filed accounts in Companies House show pre-tax losses for the year to 29 December 2018 rose to £9.2m, compared to a £4.8m loss in the shorter 35-week period to the end of December 2017.
Sales rose to £638.2m from £442.5m last year, though this represented a 2.9% decline on a pro-rata basis.
Executive chair Di Walker said the group was “pleased with the performance of the business” as it “maintained turnover levels and saw only slightly reduced EBITDA despite a backdrop of margin pressures including Brexit-related inflation, retailer pricing pressure, weak pork markets and weak international markets”.
The accounts said the inflation in pig feed prices after the hot summer of 2018 in particular put pressure on margins.
EBITDA rose to £28.4m from £19.5m, but headline profits were hit by a number of one-off charges related to acquisitions, legal expenses and writedowns.
Total exceptional items were £5.1m in the year, including a £1.3m writedown of its Karro McGee ROI business and £1.9m relating to a court case regarding a 2016 workplace accident.
It also incurred £1.9m of acquisition-related costs,£1.3m of which came from its efforts to buy Young’s Seafood.
Capvest was close to agreeing a deal last year, but the process stalled due to a disagreement over valuation. It is thought CapVest is still in talks over Young’s, with Sykes Seafoods reportedly its main rival.
CapVest invested over £21m in capex projects during the period that it says will have a “material benefit on the profitability of the group”.
CapVest was “confident” 2019 would bring further improvement in the profitability of the business through further M&A activity, operational efficiencies and an improvement in the international pork markets which have seen a softening of pig feed prices.