Losses have narrowed significantly at Vibrant Foods as the private equity-backed group made progress in a turnaround attempt.
Accounts filed today at Companies House revealed turnover at the world foods specialist fell 7% year on year to £181.5m in the 12 months to 31 December 2023, after the company sold off non-core assets in snacking as well as its cash & carry business.
However, sales from continuing operations were back in growth, up 2% to £178.5m, driven by a transformation plan spearheaded by CEO Damian Guha and chairman Nish Kankiwala, who were brought in by owners Exponent in 2023.
Pre-tax losses narrowed considerably last year, falling from £73m in 2022 to £48.6m, while operating losses shrank from £48.5m to just £5.2m.
While the bottom line has improved, Vibrant has now racked up combined losses of more than £310m since the platform was created by Exponent in 2020 through the acquisition of five Asian foods brands: TRS, East End Foods, Cofresh, Fudco and Everest Dairies. However, much of the total is made up of non-cash writedowns.
And the cost of servicing its mountain of debt – which increased by more than £30m to £365.3m last year – continues to burden the group, with finance costs, including interest payments, totalling in excess of £40m in 2023.
Vibrant was hit by a significant downturn in performance in 2022 as it struggled to pass on massive cost inflation across ingredients, energy, transport and warehousing.
Last year, it took corrective action to stabilise the group, including agreeing a £32m refinancing.
“We are thrilled with the significant progress made over the past 18 months and are excited for what lies ahead for Vibrant Foods,” Guha told The Grocer.
“We’ve worked diligently to rebuild the foundations of the business, focusing on getting the product range, quality, and availability. Alongside this, we’ve made meaningful strides in evaluating the impact of our operations on the communities we serve and the environment.”
It is understood trading operations at the group are now profitable and losses are expected to narrow further in 2024, with revenues up 7% year on year.
Vibrant’s core categories have also continued to experience growth in both value and volume, driven by strong demand for its products.
The transformation plan has also included transitioning to a new distribution network to help drive efficiencies.
Staff numbers have reduced at the group as result of the action taken, with average employees in 2023 down year on year from 754 to 564, reducing labour costs significantly.
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