Baxters revenues soar as Wornick deal drives up international sales

Revenues leapt 40% at soup manufacturer Baxters last year after huge US growth saw international revenues outstrip UK sales.

Baxters Food Group reported turnover up 40% to £226m in the 52 weeks to 30 May 2015, largely thanks to its key acquisition of US business Wornick Foods during the period.

The impact of revenues from Wornick, which supplies convenience foods to the foodservice trade and the US military, helped more than double international sales from £58.9m to £125.1m during the year.

The accounts also revealed that Baxters paid £87.4m for Wornick, excluding fees and expenses, and the acquisition earned a profit of $3.6m (£2.3m) after tax on a turnover of £98.7m.

That meant Baxters’ international revenues were larger than UK sales for the first time, with turnover in the UK dipping by 0.5% to £101.2m.

Executive chairman Audrey Baxter called the Wornick deal an “excellent strategic acquisition” and said the overall business had performed in line with expectations.

“Through our M&A activity over the past few years we now have a number of factories in five clear manufacturing geographies,” she said. “We intend to undertake a number of initiatives to improve profitability by delivering improvements to our manufacturing efficiency across our global manufacturing base.”

Baxters’ pre-tax profit on ordinary activities before exceptional items increased by 21% to £11m. However, a £5.5m exceptional charge, mainly relating to £4.2m of restructuring costs, meant it reported a post-tax loss of £379,000 after a small profit of £23,000 last year.

A £2m dividend paid to directors during the period took retained losses to £2.4m.

Looking forward, Baxters said NPD would be a key focus as well a “major initiative” in its UK and central European operations.

Overall group headcount rose from 1,154 to 1,600 with wages and employee payments up 26.4% to £42m.