AVARA FOODS has posted a pre-tax loss in its most recent financial figures, covering a period where inflation rose rapidly and consumer demand cooled.

Turnover in the year to 31 May 2023 rose from 1.26bn to 1.51bn but pre-tax losses were recorded as £12.8m, lower than the £16.1m reported a year earlier.

See also: Avara Foods signs up to new sustainability coalition

In its directors’ report for the period, the firm said the financial year 2023 was “characterised by pragmatism and flexibility”.  

Cost increases, particularly in feed, fuel and utilities, “led to inflationary pressures not seen for a decade”.

A consequent impact on the cost of living curtailed consumer demand, it adds.

Restructure

Avara responded by beginning a restructuring which is set to conclude in its current financial year “to align an optimised operation structure with volumes, whilst maintaining the capacity for growth”.

The processor, which says it supplies up to 4 million chickens a week employs 6,475 people across the UK.

It said despite challenges, the business improved its Earnings Before Interest, Debt and Amortisation (EBITDA) by £12.7m, to £12.7m.

Outlook

The firm said that, despite challenges, performance for the current year was running in line with budget and cash “continues to be well controlled and remains positive with no bank borrowings utilised to date”.

“With the restructuring due to complete in the current year we look forward to the full-year effect of operating efficiencies and associated cost savings”.

The financial report also highlights progress Avara has made against its sustainability targets, which include:

  • The fourth year of publishing a full Scope 1, 2 and 3 footprint
  • Year-on-year reduction in soya use
  • Completing farm carbon footprints for 60% of its farming base – to increase to 100% in 2024