Wellness Foods has generated profits of more than £50m and cleared its large debts thanks to the sales of the Rowse Honey and Dorset Cereals brands.
The healthy food group, which now consists of the Fruit Bowl snacking brand and Orchard House Foods, netted £47.7m on the disposals of the household brands. It pushed pre-tax profits to £52.3m in the year ended 31 December 2014, compared with £7.1m in 2013.
Accounts published at Companies House reveal Wellness, backed by Irish horseracing tycoons John Magnier and JP McManus, made net proceeds of £155.9m as it sold Rowse to Valeo Foods in May and Dorset to Associated British Foods in June. The deals helped clear historic bank debts of more than £125m and left the group with a cash balance of £20.1m at the year end.
Wellness had struggled under the weight of its leveraged position in recent years after going on an acquisition spree for upmarket brands before the credit crunch hit in 2008. Debt repayment charges saw the business tumble into the red with losses of £27.1m in 2008 and £22.1m in 2009. Parent company Erbium Holdings refinanced Wellness in December 2009, injecting more than £70m of equity to reduce debts and shore up the balance sheet.
“Following the disposals [of Rowse and Dorset] the group remains focused on the market leading Fruit Bowl brand and also Orchard House Foods, who are a key supplier to the major grocery retailers of premium own-label prepared fruit, premium own-label freshly squeezed juices and smoothies and premium own-label fresh fruit desserts,” the business review in the accounts said.
“The group is trading well in a difficult economic climate. Although we foresee that the food market will remain challenging, our key management team, brand strengths and customer relationships are such that we anticipate continue profitable growth can be maintained.”
Turnover from the continuing operations at the business increased 4.6% to £119.7m in 2014 as a result of “increased activity levels” and operating profits more than doubled to £3.3m.
Total revenues for the year came in at £169.8m, down from £239.1m in 2013, as Rowse and Dorset contributed £50m until their respective sales in the summer, down from the combined £124.6m in the full previous year.