Yeo Valley returned to the black as its turnover surged passed the £300m mark during its latest financial year, recently-flied documents have revealed.
The Somerset-headquartered brand has reported a pre-tax profit of £4.1m for the year to May 28, 2023, after having made a loss of £2.7m in the prior 12 months.
At the same time, Yeo Valley’s turnover increased from £258.9m to £315.9m.
But despite the positive set of accounts, Yeo Valley said it remains “concerned about the viability of elements of British farming and their returns being below the cost of production”.
It added that the company has already taken steps to protect itself from a potential recession in the UK.
‘It is not in anyone’s long-term interest to use volatility to create windfall profits’
A statement signed off by the board said: “At the beginning of the financial year, the trading conditions for Yeo Valley Production were still very volatile. Inflation was rising rapidly and this impacted all aspects of the business.
“Since December 2022, the volatility has declined and rate of change of inflation has slowed. This has allowed a return to more normal trading conditions.
“We are grateful for the collaborative way our customers have worked with us during this challenging period.
“It is important to us that the quality, healthy products that we make are both affordable and ensure great farming is viable and valued.
“We have worked closely with our customers to ensure that the inflation passed on to customers is minimised.
“With this in mind, we are pleased to have returned a small profit for the year, even if it is below our long-term target.
“It is not in anyone’s long-term interest to use volatility to create windfall profits.
“Since the highs of late 2022 and early 2023, many farm gate milk prices have fallen rapidly. This has allowed deflation to be passed on to the consumer and make healthy, natural yoghurt very affordable.
“However, we remain concerned about the viability of elements of British farming and their returns being below the cost of production.
“We hope the shocks of the last few years will end and British farming will continue to be well supported by both the government of the day and a fair market price. We will continue to make decisions to do our bit to support great farming.”
At the end of the financial year, Yeo Valley acquired Tideford Organic which makes plant-only soups.
During the 12 months, the average number of people employed by Yeo Valley fell from 1,533 to 1,520.
‘Consumers are looking even harder for good value’
On its outlook, Yeo Valley added: “The business outlook for YVP looks more encouraging than it has for a few years.
“The rate of inflation is expected to continue to fall and we are also expecting an easing of energy prices and, eventually, interest rates.
“Clearly the level food inflation has had significant impacts on people’s cost of living.
“Naturally, this means that consumers are looking even harder for good value.
“YVP’s breath of product offering means that we can continue to grow our volumes even if some of the more expensive products experience some volume declines.
“In effect, we have created a natural hedge in the YVP business to help the business through recessionary shopper behaviour. We expect our year-on-year volumes to grow.”
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