Bakery giant Warburtons more than doubled its profit after it poured investment into diversifying its product range beyond its iconic loafs.
The Bolton-headquartered group grew its pre-tax profit to almost £30m in the 12 months ending September 30, 2023 – a huge jump from the £13.3m it made the year before.
Its turnover increased by 17 per cent during the year, hitting a new record high of £711m compared to just over £600m in the period prior despite the soaring cost of its raw ingredients and rising wages.
The company, which is led by the fifth generation of the Warburton family, has invested heavily in new product launches over the past few years as plummeting demand for traditional sliced bread continues to put pressure on bakers.
However the business said this had been offset by shoppers snapping up its “other wrapped bakery products” including soft naan breads, bagels and “fruity buns”.
Bakery Warburtons has more than doubled its profit after adding new products to its range. Photo: Warburtons
In a business review published to Companies House, Warburtons said: “The wrapped bakery market remains very competitive, with the underlying long-term declines in the core bread market continuing to be offset by growth in other wrapped bakery products.
“Volumes remained strong during the period driven by strategic partnerships and new product introductions, supporting a 17.4 per cent increase in turnover.”
Wheat price woes
The ongoing conflict in Ukraine pushed wheat prices to their highest point ever last year after Russia pulled out of an agreement that guaranteed safe passage for ships carrying cereals through the Black Sea.
Prices fell by 35 per cent under the deal, which remained in place for just under than a year, but soared by eight per cent in 24 hours after Russia announced it would treat ships heading for Ukrainian ports as potential military targets.
The challenging market conditions were compounded by below-average grain harvests in the UK in 2022.
Warburtons added: “The ongoing war in Ukraine continued to impact the market. Global markets and commodity prices continued to be impacted significantly and as a result the company continued to see inflationary increases in costs across key areas including wheat, energy and fuel.
“The company continued to monitor these costs and ensure appropriate strategies were put into place.”
Prices have since started to level out, which is helping to bring down the cost of food in UK supermarkets.
Who are Warburtons’ competitors?
Warburtons’ competitor Hovis reported a pretax loss of £4.8m in the 12 months ending September 30, 2023, down from its loss of £29m the previous year.
The High Wycombe-based bakery increased its turnover to just under £500m during the year, up from £301m the period prior.
Meanwhile British firm Allied Bakeries’ grocery segment — which includes brands Kingsmill, Allinson’s and Sunblest – saw its revenue increase by 12 per cent to £4.2 in the year ending September 16, 2023.