Continued expansion of Gail’s Bakery has driven revenue growth of 28% in its latest financial year.
The bakery chain was once again the fastest growing and most profitable part of owner Grain Topco, which also includes The Bread Factory and Bertinet Bakery in its portfolio. Grain Topco’s recently filed full-year results to 29 February 2024 showed retail sales of £179m, up from the £135m recorded in FY23.
This figure is almost triple the £57.1m recorded by former parent company Bread Holdings in FY21, the last financial year before Bain Capital acquired a majority stake at a valuation of £200m.
While Gail’s sales soared, significant growth was also enjoyed by the group’s wholesale business which jumped by almost a fifth from the year prior to reach £83.7m. This put its overall revenue at £231.8m (£181.8m: FY23), with EBITDA rising by 40% and hitting £43m. Grain Topco also slashed its losses from £15.4m down to £4.2m. Gross profit margin stayed at 39% but saw a slight dip, explained by increases in staff costs and utilities.
The results came at a time when several media outlets were reporting that Bread Holdings has appointed Goldman Sachs to run an auction for Gail’s next year, and that the bakery brand was expected to command a price of around £500m. Gail’s has declined to comment on the matter.
Gail’s shop estate increased by 21 during FY24 including its first openings outside of the Southeast of England, in Manchester. The business noted that wider national growth will continue in the year ahead, including reaching its target of 35 new sites inside of this calendar year. It opened its latest shop in Chelmsford today (5 December), bringing its estate up to a total of 153. In recent months Gail’s has added stores in the likes of Brentford, Bristol, Petersfield, Thame, Solihull, Sale, and Hitchin, as well as going ahead with an outlet in Walthamstow in East London, despite opposition from locals.
In its strategic report, Grain Topco revealed that a similar annual rate of expansion for Gail’s would be maintained going forward. “We recognise that to be able to grow we must continue to provide innovative world class food in attractive neighbourhoods,” added the company.
Manufacturing subsidiary The Bread Factory supplies Gail’s range to its stores, to concessions and fixtures in Waitrose, and to Ocado, as well as other producing other lines for wholesale customers. It operates bakeries in North London, Manchester, St Albans, and a 70,000 sq ft site in Milton Keynes – the latter was continuing to grow, it said, with more investment planned following the addition of new production lines over the past year.
The Bread Factory Manchester recently appointed Britain’s Best Loaf 2024 creator Tom Martin as head baker to support production ahead of a move to a larger, purpose-built facility in the city within the next two years. Bertinet Bakery has its production site located in Bath.
“The wholesale market is very competitive and growth can only be achieved by continuing to offer existing customers the highest levels of service and quality at reasonable prices, while attracting new customers with an unparalleled quality of ingredients and products,” stated the company.
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