Higgidy has recorded another double-digit jump in revenues but growth has slowed at the pie brand and losses widened last year.
The business warned margins were under pressure in the new financial year as dairy and meat prices have soared.
Sales increased 10% to £24.1m in the year to 30 September 2016, with growth largely from outside the existing customer base of Sainsbury’s, Asda, Waitrose and Booths as the business won new listings with Tesco and Morrisons.
Expansion into meat and vegetarian sausage rolls also drove growth in the year as Higgidy overtook Pukka to become the third largest brand in savoury pastry in the UK and continued to be the fastest growing in the top 10, according to the newly filed accounts.
However, growth at the company, which has more than doubled sales from £11m since 2011 and has featured in The Grocer Fast 50 for the past two years, has slowed from a 24% jump in 2014/15.
Operating losses also deepened to £513,500, compared with £133,000 in the previous year, which Higgidy said was largely the result of a change to how depreciation of plant and machinery was estimated. This change led to a £750,000 depreciation charge over and above the amount calculated by the previous methodology.
Higgidy fell into the red in 2014/15 as the pie maker invested £2m to expand its West Sussex factory. The business spent another £1.1m in 2015/16 on plant, machinery and leasehold improvements to open up capacity and improve efficiency.
MD Mark Campbell told The Grocer: “It is a tough trading environment at the moment, with massive input cost inflation and a changing retail landscape, but we are focusing on doing what has helped us grow so consistently over the last few years, which is market leading innovation that excites our consumers.”
He warned rising commodity prices, with the largest increases in dairy and meat, were set to continue putting pressure on margins.
He added: “Some of our major customers have also changed their approach to promotions in order to focus on their own label and this will affect our growth. The country’s impending Brexit, whilst not likely to directly affect our sale, will almost certainly put further pressure on our input prices and lead to future uncertainty in the market.”
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