Profits at Bolton-headquartered bakery giant Warburtons were cut after the family-owned business faced a rise in costs to battle the Covid-19 pandemic and cope with a major delivery driver shortage, it has been revealed.
The business, which is led by the fifth generation of the Warburton family, has reported pre-tax profits of £15.2m for its latest financial year, down from the £23.6m it achieved during the prior 12 months. The company suffered a fall in profits despite its turnover rising by more than £10m to £567.9m.
In newly-filed documents with Companies House for the year to the end of September 2021, Warburtons said its profits declined during despite the rise in turnover because of "commodity inflation and elevated costs linked to Covid-19 and the driver shortage" towards the end of the period.
Total external charges increased from £115.1m to £120.8m while staff costs rose from £205.5m to £217.2m. The average number of people employed by Warburtons during the year totalled 4,809, down from 4,874.
A statement signed off by the board said: "The wrapped bakery market remains very competitive, with the underlying long-term declines in the core break market being offset by growth in non-bread baked products. The Covid-19 pandemic had a significant impact on the business throughout the financial year.
"The principal focus of the group during this time has been on the health and welfare of its employees. A crisis team has been put in place through [out] to ensure appropriate measures were put in place across the business and government advice monitored and followed.
"The national driver shortage has also placed significant pressure on the business during [the] final quarter of the financial year. Volumes remained strong during the year, driven by strategic customer partnership and new product introductions, supporting a 2.1% increase in turnover.
"The group also experienced a step up in costs to ensure the safety of its colleagues and cover absenteeism through the pandemic, together with higher costs to secure service to customers during the period of driver shortages.
"The group continues to focus on the quality of product and service supported by the ongoing development of new product ranges. The continuing innovation and investment in new capability will ensure we are well placed for future progress."
On its future outlook, the company added: "The impact of the Covid-19 pandemic continues to create a level of business volatility and uncertainty. Despite this, the directors expect the general level of activity to remain broadly consistent in the forthcoming period with the current performance.
"The continued development of new product ranges, combined with a focus on quality, service levels and cost management, leave the business well placed to address the challenging market environment."
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