laila's fine foods curry

Laila’s’ directors confirmed that the sales slump was due to “the loss of a key customer”

Sales dived 12.5% at ready meal supplier Laila’s Fine Foods in 2017 after the loss of a major contract.

The Blackpool producer, which had seen rapid growth of 45% in 2016, saw sales growth reverse, falling from £36.2m to £31.6m for the year ending 30 June 2017.

It returned to significant growth in 2018, hitting £42m in turnover in the year to June 2018, but nevertheless had a “disappointing” past year and is currently in discussions to secure a £1m loan needed for working capital, the company said in newly released Companies House accounts.

Laila’s’ directors confirmed that the sales slump was due to “the loss of a key customer”, which also heavily impacted profitability.

Operating profits for the year fell almost 80% to £561k, as margins were also impacted by “customer changes”, ingredient price rises and “operating inefficiencies” related to its recent factory expansion, intended to double production.

Read more: Russell Hume administrators destroyed £8.5m-worth of meat stock

The manufacturer of frozen and chilled meals has therefore secured price increases with major customers and “reviewed production processes” to deliver improved margins.

“The directors have been disappointed with the company’s recent performance but believe the company is now on a much stronger footing to ensure recent and continuing sales growth delivers incremental profitability,” it said in its annual accounts.

“The company has spoken to an external funder, and is in the process of completing the formalities required to down a £1m loan. This will provide additional working capital to support the growth of the business.”