Avara Foods has reported annual sales of £1.2 billion in the year ending 31 May 2020, up 5% year-on-year. Profit for the financial year was £11.2 million, up 3.6% on the year before. This growth was achieved despite the significant disruption to the market caused by COVID-19 in the final quarter of the financial year.
Margins were squeezed by the impact of the pandemic, according to the annual report, with an additional £6m spent on additional hygiene measures and infrastructure to enable staff to comply with social distancing. In addition, margins were hit by the closure of the foodservice market and by trading market prices falling sharply in the face of oversupply.
The company recorded costs of £5.8 million associated with the closure of its duck business, a decision it took due to changing market conditions. In late 2019, the spread of African Swine Fever (ASF) in pigs caused many Chinese farmers to convert their pig operations to ducks. This huge growth in duck numbers caused the global price of feathers to collapse. The export of feathers was a valuable part of its business, Avara Foods notes in its annual report. The closure of restaurants in the spring compounded the problem and the decision to close the duck business was announced in April 2020.
Andy Dawkins, Chief Executive Officer at Avara Foods commented: “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. 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.”