Profits have soared at Ministry of Cake in its first full year under new ownership as the foodservice supplier won more sales with higher-margin customers.
Sales at the business grew 2% to £24.7m in the year to 30 September 2015 thanks to contract wins with new and existing customers. Improved operational efficiencies and lower raw material costs also helped operating profits climb from £246k to £1m, and pre-tax profits from £150k to £800k.
CEO Chris Ormrod, who led an MBO in May 2014 backed by private-equity firm LDC to acquire the business from Greencore, told The Grocer revenues would accelerate past £30m this year as the full benefit of the new contract wins came through.
He added the business was selling more than three million slices of cakes a week, which he attributed in part to the popularity of Mary Berry and The Great British Bake Off.
“Our growth is underpinned by continued new product development across our range, but we’re also starting to build real scale in our export business,” Ormrod said. “We now send cakes from Taunton to Europe and beyond, with ongoing discussions as far away as China and Australia.”
Overseas sales accounted for just £1m in 2014/15 but are estimated to make up about 20% of the business within the next three years.
Ministry of Cake, which has been in business for more than 150 years and today makes cakes and gateaux under its own label for foodservice, catering and wholesale customers, slumped to a £1.6m loss in 2013 as sales dipped below £20m and streamlining by Greencore led to an exceptional charge of £2.6m. The listed Irish sandwich and ready meal supplier put Ministry of Cake up for sale soon after, with management and LDC stumping up £11m to take control of the business.
In addition to the change in ownership, a factory in Torquay was purchased to make a variety of puddings under new business Ministry of Pudding, which has just produced its 10 millionth pudding.
Ormrod said investment in the business stood at £1.7m in the past two financial years, with headcount rising to close to 300 staff as the company gears up for budgeted future growth.
Underlying earnings are forecast to climb to £3.5m in the current financial period.
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