High-end desserts specialist Pots & Co cut its losses in a “milestone” year that saw it prioritise profitability over sales growth and move towards break-even.
Overall group sales were down £2m to £11.1m in the year to 31 December 2023 as it rolled back US growth ambitions to focus on profitable accounts.
Despite the headline sales drop and “major external challenges to the desserts category”, the group said its UK business saw double-digit sales growth in six of the eight retailers it traded with, while also seeing strong momentum in foodservice.
A focus on efficiencies, and tight controls on overheads and salaries, was further helped by easing inflationary pressures on raw materials and logistics to improve the bottom line.
As a result, its EBITDA loss for the year was cut to £392k from £1.62m, while pre-tax losses were more than halved to £1m from £2.1m.
“Last year marked a significant milestone in Pots & Co’s journey toward profitability and sustainable growth, all against a backdrop of challenging market conditions,” said joint CEO Alexandros Theocharides.
“We made substantial progress in the second phase of our two-year strategic plan, prioritising the improvement of our bottom line over sales growth. This focus on financial health has paid off, with a remarkable increase in EBITDA despite unprecedented inflationary pressures.”
The group aims to drive further efficiencies by outsourcing its production to a major third-party manufacturer, which it said will deliver a £600k annual addition to profitability and remove a £1.6m liability from running its London manufacturing site.
Nevertheless, joint CEO Fraser Thomson stressed the supplier remained committed to driving innovation under the new arrangements.
He commented: “Throughout this journey we have remained committed to our mission of delivering chef-standard desserts that consumers can enjoy at home, using the same high-quality ingredients and traditional craft we have always prided ourselves on. Innovation remains at the heart of what we do, with successful launches like our Bread & Butter Pudding leading the way.
“The progress we’ve made this year not only strengthens our current position but also sets the stage for future growth.
“As we look ahead, we’re excited to leverage our new manufacturing partnership, increasing our ability to unlock new markets and drive a more varied product range to both new and existing customers. This will enable us to continue our sustainable growth journey in profitable markets, ensuring we continue to build on our successes for the long term.”
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