Hovis has dropped further into the red in its latest financial year with bread sales falling 8% compared to the previous term.
In newly-filed accounts for the 52 weeks ended 28 September 2024, Hovis Limited – which produces and distributes the bread brand – posted an operating loss of £6.9m, nearly double that of the £3.5m loss recorded in the previous term.
Turnover went down by £38m to £439.6m, while distribution costs rose from £83.8m in FY23 to £86.7m. The firm noted that these two factors were behind a £2.2m reduction in EBITDA year on year, which ended up at £18.7m.
Meanwhile, a separate filing for parent company Hovis Group – which last year reported a return to profitability under new management – showed how revenue had decreased by 9% to £446.8 with operating profit reduced by around £300k to £2.9m. Administrative expenses were just a third of that from FY23 (£8.4m), however, allowing the business to raise its EBIDTA by 6% to £28.4m.
In addition to the core bakery business, the group encompasses logistics services for third-party baked goods. Hovis highlighted how customer partnerships had been strengthened in FY24, supported by long-term agreements, while its network capability – boosted by a fleet replacement programme – had enabled it to expand its logistics services and deliver 40% year-on-year growth.
Despite “tough trading conditions” continuing including significant inflationary headwinds, Hovis said it had successfully implemented a comprehensive cost improvement strategy to lower outgoings across the supply chain. This had resulted in EBITDA margin for the group going up from 5.5% to 6.4%.
Overall bread share also remained stable, it declared, demonstrating the resilience of the Hovis brand, which is second only to Warburtons in the UK. While Jason’s Sourdough has been rapidly rising and is set to leapfrog Kingsmill into third spot, a potential merger between Hovis and Kingsmill may yet shake up the wrapped bread charts further.
Innovation remains a key priority for Hovis, it added, with the financial year seeing a new Farmhouse Batch loaf unveiled. “This new product line is aligned with consumer demand for premium, high-quality bakery products, reinforcing our brand’s heritage and increasing consumer loyalty,” commented CEO Jon Jenkins. The company also signed an exclusive three-year licensing agreement with Modern Baker to produce the gut-healthy bread brand Superloaf.
Hovis has continued to roll out new premium items in 2025, including four different sub rolls and three loaves. A new brand campaign called ‘Strength Baked In’ has also been launched across digital social, PR, retail and other channels, which Jenkins noted will help “provide fresh impetus to our core bakery business”.
NPD launches at Warburtons helped drive sales and profit gains in its FY24 results, including a 4.2% increase in turnover to £741.1m and a 7% jump in pre-tax profit to £31.8m. Meanwhile, losses deepened during a most recent 24-week period at Allied Bakeries – which produces bread brands Kingsmill, Allinson’s, and Sunblest – forcing owner Associated British Foods to announce it was ‘evaluating strategic options’.
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