During the past financial year, United Kingdom-based integrated poultry company Avara Foods has undergone a significant restructuring of its operations.
Driving the recent transitions made by Avara Foods was the aim to make its supply chain more productive and efficient.
As it released its annual report and accounts for the 12 months to May 31, 2024 (FY2023-2024), the company states it is in a strong position financially, and has no bank borrowings. Furthermore, its shareholders support the business changes necessary for future stability and growth.
During the latest reporting period, Avara Foods opened a dedicated facility for value-added products in the West Midlands, while closing two of its other processing plants (at Newent and Abergavenny). Following a customer-led initiative, the company reports it is also rearing birds to higher welfare standards.
According to CEO Andy Dawkins, these business changes are delivering positive results, just as the market returns to a balance between supply and demand.
“2023-2024 was planned to be a year of change, but it was necessary to position us for the future,” he said. “We are already reaping the benefits in financial performance in FY25, which is running in line with expectations. While closing facilities and losing valued colleagues is never easy, we did this in the right way in line with our strong values. I am heartened by the opening of our new facility at Wednesbury, which has grown quickly on the back of strong customer support.”
Headline figures for FY2023-2024
For the 12 months to the end of May of 2024, Avara Foods reports total turnover of more than GBP1.33 billion (US$1.70 billion). This compares with GBP1.51 billion for FY2022-2023. However, at close to GBP1.27 billion, the cost of sales was lower than the GBP1.40 billion recorded for the previous year.
Operating and restructuring costs were significantly higher during the reported year (at GBP43.2 million) than in the comparable period (GBP266,000), as a consequence of the business restructuring undertaken, as noted by the CEO.
The higher costs fed into an operating loss for the year at close to GBP49.4 million, which compares with around GBP12.8 million for FY2022-2023.
In spite of the business transformations during the reporting year, Avara Foods reports an Earnings Before Taxes, Interest, Depreciation, and Amortization (EBITDA) loss of GBP25 million for FY2023-2024. Including one-off costs of GBP11.5 million, this was in line with forecasts, the firm reports.
More on Avara Foods
Annual production of 280 million birds puts Avara Foods in the Top 10 poultry companies in Europe, according to WATTPoultry.com’s Top Poultry Companies survey for 2023. As well as chicken, the company offers products based on turkey and duck meats.
The company was founded in 2018 as a joint venture between Faccenda and Cargill’s fresh poultry business in the United Kingdom (U.K.). Its integrated supply chain is entirely based in the U.K.
In the latest financial report (for FY2023-2024), the company states it is among the country’s largest producers of fresh protein, with output of up to four million birds per week. As well as chicken, it produces turkey meat year-round, and Christmas birds. With a workforce of 6,000 nationwide, it covers the whole supply chain from feed milling and hatcheries to farming, food processing, and transport/logistics.
Last year, the company was facing allegations from a law firm of causing environmental degradation as a result of its commercial chicken farming activities.
