Freshways continued its 2022 rebound with a 435% jump in pre-tax profits last year, its latest financial results have revealed.
The mid-market milk processor and supplier saw sales edge up by 3% to £359m in the 12 months to 30 December 2023, according to the annual report and accounts for parent company Nijjar Group Freshways Holdings Limited, posted at Companies House.
But on the back of a series of cost increases to its customers, the majority of which were now on monthly price reviews, the business experienced a “positive transformation” in profitability, Freshways MD Bali Nijjar wrote in the report.
In addition to pre-tax profits rising by £7.6m to £9.4m, operating profits jumped by 290.4% to £11.4m. Its financial position was further boosted by a 6.6% fall in the cost of sales to £271m.
Freshways’ cash at bank and in hand rose by 34% to £2.8m, while trade creditors fell by 5% to £27.9m and net liabilities fell by 59% to £3.1m, though the accounts also showed its exposure to bank loans and overdrafts increased, by 7% to £28.2m.
Nijjar cited the acquisition of Kent Dairy Company at the turn of 2023 as another driver of its improved performance – with the deal “strengthening the group’s position in milk distribution”, despite a £6m write-off linked to the deal. This purchase was followed by the acquisition of Müller’s lossmaking Milk & More in December 2023.
Freshways last month said the doorstep delivery business was “moving forward positively” following its acquisition, and while Milk & More had lost more than £20m last year, Nijjar confirmed it had been profitable in 2024 so far.
The Grocer reported in June that the business had radically overhauled Milk & More, with a shift towards more mainstream brands and the removal of most products in its much-vaunted refill offering, as it sought to leverage Freshways’ existing independent retailer supply chain.
Freshways also acquired Haverfordwest-based milk supplier Totally Welsh Dairy last month, as part of a move to reinforce its supply of milk in glass bottles for Milk & More.
Elsewhere, the supplier’s results also highlighted foodservice as a “key growth area”, and it pointed to “significant investment” in updating production sites, plant and machinery, with a strong emphasis on improving the company’s sustainability.
However, the long-running deal to merge Freshways with its rival Medina Dairy, which gained clearance from the CMA in 2022, was still not fully complete, according to separate accounts published in July for Medina parent MHL Group Holdings, which showed the company’s main dairy subsidiary ceased to trade in 2023 as part of the merger process.
The accounts said the merger was expected to be finalised “in 2024”.
Freshways was asked for comment.
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