Sales have surged at premium petfood manufacturer MPM Products in its first full year under private equity ownership.
Turnover jumped up by 19% to £52.9m for the financial year to December 31 2017, with profit after tax also leaping up, to £3.7m from £3m the previous year. The company was picked up by ECI for about £50m in March 2016.
The consumer trend towards premium and natural products meant the trading outlook remained positive, said MPM. “The company has looked to build its competitive position through innovation and speed to market, whilst establishing a deeper understanding of the key markets and customers,” said CFO James Bracewell.
“The trading outlook remains positive given the company’s brands are well positioned in their respective markets and the consumer trend towards premium, natural products is expected to continue.”
Shareholders’ funds also significantly increased from the previous financial year, up from £6.6m in 2016 to £10.3m for 2017.
Since the ECI and MPM deal, there have been a number of significant acquisitions of pet food firms, with Armitage Pet Care, Pet Food UK and Forthglade all recently purchased by PE groups.
Only last month Nestlé took a majority stake in the fast growing Tails.com, a direct-to-consumer dog nutrition startup, for an undisclosed fee, with dealmakers suggesting more petfood acquisitions are on the horizon.
Grant Thornton’s quarterley M&A report recently said the pet food space remains ripe of consolidation given it remains an “immature and fragmented market” in the UK.
Another dealmaking source said the defensive nature of the sector meant it is likely to still see strong growth during the current difficult economic conditions in the UK. He also pointed to the raft of private equity deals in the space over the past couple of years, meaning many of these businesses are likely to come back onto the market soon.