Avara Foods: £6m COVID-19 spend pays off as firm prospers

By Rod Addy contact

- Last updated on GMT

Avara Foods anticipates a strong period of growth ahead
Avara Foods anticipates a strong period of growth ahead

Related tags: Meat & Seafood, factory design & Maintenance, Finance

Avara Foods spent £6m on COVID-19-related measures in the year to 31 May 2020 and the investment was rewarded with an uplift in sales and pre-tax profit.

Rising above COVID-19 presented would have been impossible without exceptional support from all the company’s employees, who were committed to keeping food supplies moving, the company claimed in its annual financial report. With their support, it implemented comprehensive protection measures and safeguarding procedures and radically overhauled employee benefits and sickness policies to better support colleagues. 

The company spent more than £6m on social distancing measures, new PPE and staff recognition payments during the pandemic, alongside continued enhanced absence pay so staff could refrain from work if unwell or required to isolate. The business stated in its report, which coincided with trading updates from Britvic, Tate and Lyle and Diageo​, that it had navigated the pandemic without taking advantage of Government schemes or financial assistance programmes.

Avara said its agility and strong working partnerships with key customers saw the company repurpose raw material and adapt facilities to meet higher retail demand. This increase had compensated in part for the disruption created by hospitality closures during the first national lockdown, it said.

Investing in operating efficiencies and capacity

It had also continued to invest significantly to improve operating efficiencies and increase capacity and volumes ahead of rising customer demand.

The company reported a year-on-year increase of five percent in turnover, from £1.1bn to £1.2bn and a £2m increase in earnings before tax from £13.7m to £15.7m in its second full year of trading. That was despite the significant impact of COVID-19 on trade, costs and margins in the final quarter. 

One-off costs of £5.9m were incurred following the closure of the company’s duck operations, announced in April 2020, precipitated by the fragility of the global duck market and further exacerbated by the challenges of COVID-19.

New technology, infrastructure and people

Despite continued economic uncertainty created by Brexit and COVID-19, with the mitigations and contingencies it had deployed, the business anticipated another period of strong growth and further year-on-year improvements in operating performance. It vowed to continue to invest in new technology, infrastructure and its people, pressing ahead with capital investment projects and modernisation plans. 

“Despite the challenges 2020 presented, our plans remained on-track and we have delivered more value to customers than ever before - a real credit to all those who work at Avara,"​ said Andy Dawkins, chief executive officer. "In the face of COVID-19, we invested heavily to protect the wellbeing of every single colleague and to ensure the business was stable and resilient.

"I’m proud by how we have continued to manufacture great products, maintained our high standards and strengthened our customer relationships in these most difficult of times. We anticipate another period of strong growth ahead - as a business we’re agile, ambitious and well-placed to weather the uncertain market conditions created by Brexit and COVID-19.”

Related topics: Meat, poultry & seafood, Business Leaders

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