Avara Foods Telford

The JV between Faccenda and Cargill’s UK poultry division was officially launched in january 2018

Avara Foods – the £850m poultry joint venture between Faccenda Foods and Cargill’s UK fresh poultry business – has enjoyed a solid start after launching last January, according to its latest accounts.

The business reported turnover of £476m and pre-tax profits of £13.5m for its first accounting period up to the end of May 2018, with gross profit margin at 10.6%.

This period began on 31 October 2017, and represents some seven months of accounts from the Faccenda business, with a further four months of accounts taken into consideration from 27 January for Cargill’s UK poultry business Freemans of Newent.

“In terms of overall business performance we saw some areas of good performance in a highly competitive market,” the supplier said in a statement. “Consumer demand was up, above forecast, reflected in increasing sales over the year.”

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Coupled with prior work by Faccenda to improve productivity and efficiency, the business was “able to offset rising agricultural commodity price inflation and weak sterling to deliver strong performance”, it added.

But looking ahead to the supplier’s first full financial year, which ends in May, Avara warned only one thing was guaranteed for the future: uncertainty.

“While we anticipate consumer demand for poultry will continue to grow, the ramifications of the UK’s exit from the European Union, and the terms we leave on, will have significant possible impacts.”

These included a reduction in the availability of labour, the potential imposition of tariffs on imports and exports, a further weakening of sterling, cost inflation rising faster than prices (driven by labour and commodity costs), and potential competition from new markets.

“This is in addition to the current and ongoing consolidation and change in the UK grocery market, which will bring fresh opportunity but also challenges for the food supply chain,” it added.

But despite these potential challenges, the business was “optimistic and confident for the future”, said Avara CEO Andy Dawkins.

“We are committed to a programme of investment and the continuing development of a culture with people at its heart, which will ensure we are fit for the future – whatever it looks like.”