A £40m contract to make cakes for Marks & Spencer has helped drive turnover to more than £140m at an Oldham-headquartered business.

The company also revealed that its bottom line was hit by more than £10m of one-off costs relating to the new contract.

The latest set of results for Park Cakes Acquisition show a turnover of £141.3m for the year ending 28 March 2015, up from £112.2m in the prior year. The results were boosted by winning Marks & Spencer's cakes business, which was announced in February 2014.

A report prepared by directors said: "Sales were very significantly up on the previous year due to the award of the annualised £40m of new business from Marks & Spencer where production started partway through the year. 2015/16 will be the first year showing the full sales value increase of this award.

"Participation in retailer promotional activity was reduced in the year as some retailers concentrated on everyday low price strategies. Commodity prices remain volatile, but some are down year on year due to international political actions resulting in increased supply in the UK and beneficial movement in exchange rates."

Pre-exceptional earnings before interest, taxes, depreciation and amortisation (EBITDA) remained flat at £2.2m in 2014/15. This excluded a host of one-off onboarding costs incurred during the launch of new products, such as planning new production facilities, moving existing facilities to use space more efficiently, installing new equipment and testing products.

In the results, Park Cakes Acquisition identified £11.1m of exceptional items in total, of which £10.7m was attributed to project costs related to the onboarding of new products.

Statutory pre-tax losses trebled to £13.5m over the same period.

Headquarted in Bolton, Park Cake also has a factory in Bolton. It supplies products such as angel cake, coffee sponge roll and apple turnover to a range of supermarket and retail clients

Source: TheInsider

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