Strong competition in the foodservice market contributed to an £11m drop in revenue at bakery supplier CSM UK last year.
The company has reported £252.4m revenue in the 52 weeks ending 31 December 2018, down from £263.3m in the previous year, in documents filed at Companies House.
Sales volumes had fallen, due to a combination of competition in the foodservice channel and deliberate rationalisation of the company’s product range to boost margins.
CSM said the drop in volume had been partly offset by price increases that had been introduced in response to rising commodity costs, and steps to improve profitability, including product reformulation, waste improvement and costs management. The company has also cut administrative costs from £5.6m in 2017 to £2.8m last year.
These moves contributed to operating profit/loss improving from a loss of £11.2m in 2017, when CSM had been badly hit by cost increases including the sharp rise in butter, to a profit of £3.3m 2018. After taxation, the business made a loss of £914,000, down from £15.2m in 2017.
Looking ahead, CSM said its management team had reviewed the risks of a ‘no deal’ Brexit and had put plans in place to mitigate the potential impact.
“These include preparations to comply with potential new customs formalities, to mitigate potential financial risks relating to tariff or currency risk, to mitigate short-term disruption due to supply chain disturbance, to ensure supplier readiness, and to be aware of new regulatory compliance requirements,” stated the business.