Avara Foods has declared that its financial recovery is complete, with the poultry processor now laying the foundations for a return to sustainable profits – despite rising costs, legal pressures and ongoing disease risks.
In its newly published annual report for the year ending 31 May 2025, the company says it has stabilised operations following a major restructuring programme, and is now focused on efficiency, automation and strengthening its farming model.
Turnover for the year stood at £1.316bn, slightly down on 2024’s £1.333bn. However, performance improved significantly, with EBITDA losses narrowing sharply from £14m to £1.9m, and losses after tax reduced from £49.4m to £29.6m.
Gross margins improved from 4.8% to 5.6%, while the group says operational improvements through the second half of the year have put the business on firmer footing.
Avara says the 2025 financial year marked the completion of its transformation programme, which included factory closures, supply chain restructuring and major operational changes.
Despite inflation and rising household costs, Avara says demand for fresh chicken remains resilient, with strong volume growth across its major retail and foodservice customers.
However, Avara warned that planning restrictions are preventing UK poultry production from expanding, risking increased reliance on imports. Like much of the agricultural and food sector, Avara says it is under intense pressure from rising labour and regulatory costs, driven by increases in the National Living Wage and National Insurance.
The group says its response will centre on investment in automation and operational optimisation to offset labour cost inflation. Shareholders have approved a major investment programme, now being delivered by a revamped executive board under CEO Chris Hall, aimed at restoring sustainable profit and cash margins.
Avara’s move to a lower stocking density model earlier in 2025 has delivered positive welfare outcomes, with improvements reported in bird health and performance. However, the company says avian influenza remains a major ongoing risk, particularly to its turkey operations.
The group confirmed it is facing legal action brought by law firm Leigh Day, alleging contributions to nutrient pollution in rivers. Avara says it strongly denies liability and will robustly defend the claim, though legal proceedings could take more than 12 months. At this stage, the company says it cannot reliably estimate any potential financial impact.
With nearly 6,000 employees, Avara remains one of the UK poultry sector’s biggest employers, particularly across the West and East Midlands. The company says staff turnover is now at its lowest level since Avara was formed, thanks to investment in training, apprenticeships and career development. However, recruitment of engineers and technical staff remains difficult, and Avara also aims to increase its female workforce representation from 37% to over 40% within three years.
Looking ahead, Avara says trading in the early part of the 2026 financial year has continued to improve, despite ongoing inflationary pressures.