Lily's Kitchen dog selection

Worldwide sales at Lily’s Kitchen soared by 36% in the most recent completed financial year, but losses increased significantly as a result of greater investment in the business.

Turnover at the premium petfood supplier rose to £19.8m in the year ended 31 March 2017, from the previous 12 months’ £14.6m. However, the company’s latest annual report shows an operating loss of £2.6m, compared with the previous year’s £46k, after distribution costs rose to £2.3m from £1.4m and administrative expenses grew to £9.5m from £6.4m.

This was as a result of having invested heavily in the business in the UK and mainland Europe, it said, “particularly in people, systems and marketing, in order to build and grow existing channels and open up new distribution”.

In spite of uncertainty caused by the weakened pound, Lily’s Kitchen expected to return to profit by the end of the next financial year, it added.

Its CEO and founder, Henrietta Morrison, said the brand had “performed strongly in all retailers, not only delivering impressive topline growth but also delivering incremental category growth for our retail partners”.

The petfood supplier would be in 2,000 additional stores during 2018 in the UK and internationally, she added. This would “bring new consumers to the category and increase brand awareness. Our mission is to provide proper food for pets so new distribution points will help us unlock this.”

In UK grocery, Lily’s Kitchen saw value sales in 2017 rise by 0.8% to £11.1m on volumes up 4.1% [Nielsen 52 w/e 9 September 2017].