The UK arm of Flora owner Upfield bounced back into profit in its first year of separation from former owner Unilever, but warned over the impact of soaring plant oil prices.

Sales in 2020 were up from £187.1m to £193.6m, according to newly filed accounts at Companies House.

The sales growth came despite the focus in the early part of the year on separating key back office functions from Unilever and the closure of its UK manufacturing site in Purfleet, meaning UK market volume would come from Europe.

Additionally, the impact of Covid earlier in the year saw many employees shift to working from home and the imposition of Covid-safe protocols in its manufacturing and distribution arms.

However, a spokesman said the pandemic had had a “major impact on shopping missions, with healthy eating and wellbeing becoming a greater focus for consumers than ever”.

“This in turn has positively benefited plant-based and free-from foods, as shoppers are making changes to their diet,” he said, noting the plant-based sector is now one of the fastest-growing food categories in Europe at £572m and expected to close in on £1bn by 2026.

“We therefore see great opportunity for our brands to grow further in natural sustainable healthy plant-based foods and to benefit from the overall trend towards plant-based and free-from offers,” the spokesman said.

“In addition, we see an enormous rise in consumers focus toward improved product quality with naturalness at the heart. This trend is undoubtedly something we have reacted to and continue to invest in – with Flora now made from 100% natural ingredients – and much more to come.”

The company bounced back into profit during the period, with a pre-tax profit of £35.6m from a £23.6m loss in the previous year that was driven by deal-related expenses and restructuring (including the Purfleet closure).

However, the spokesman cautioned that its margins were facing pressure from an “unprecedented” rise in cost inputs.

“Plant oils are one of our key ingredients, so current events are having an unprecedented impact on raw material prices and the availability of these key ingredients,” he said.

“Upfield continues to work to mitigate the impact of inflation where possible, whilst delivering the same, high-quality products our consumers expect.

“But these unique times require flexibility, and we are working closely with our customers as the situation evolves.”

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