Sales fell by almost a fifth but improved gross margin helped cut losses in the latest financial year at gluten-free bakery brand Genius Foods.
In a recent filing on Companies House covering results from the year ended 31 December 2024, the Edinburgh-based supplier posted revenue of £23.9m representing a 19% decline compared to its £29.6m turnover in 2023.
It noted that £1.5m of the £5.7m drop in sales had been driven by the directors’ decision to exit Europe and international markets, which allows it a greater focus on the UK moving forward.
Although Genius recorded a pre-tax operational loss for the fourth straight year, earlier this month it declared it had reached a ‘turning point’ with sights set on a return to profitability in FY25.
Latest figures appeared to support this claim with operational losses slashed from £3.2m in 2023 to £1.9m last year, while gross margin (as a percentage of revenue) increased from 32% to 36%. Genius said this reflected tighter cost control and continued improvements in operational performance initiated the previous year. In addition, efficiency gains had been delivered through reduced reliance on agency labour, waste reduction, and procurement enhancements.
The company also highlighted the implementation of a new ‘route to market’ initiative that helped reduce the volume of plastic and cardboard, and road miles used in shipping to a key UK retailer. This initiative resulted in £400k in lost revenue but gave a net benefit in excess of £250k, Genius said.
Meanwhile, an unplanned outage in its bread production line last summer caused a temporary UK stock shortage. After the line was restored, a £1m upgrade programme was launched to lessen its future downtime, elevate product quality and capacity, cut production waste, and raise energy efficiency. As Genius’ largest investment to date, the upgrade is due to be completed this month.
“Overall, 2024 marked clear progress toward a more resilient, margin-led business,” commented COO Simon Wrench on behalf of the board. “Genius remains committed to delivering great-tasting, transparent and gluten-free bakery – while improving financial strength and long-term value creation.”
During the year, the company increased its liquidity pool by £3.7m via shareholder loans from Katjes Greenfood, the German confectionery group which acquired it in 2022. A further £1.2m has been advanced to Genius in the first five months of this year, while a £5m convertible loan facility was also agreed with the parent company last December.
Genius is to leverage Katjes’ know-how in brand building to grow market share. With cost inflation on ingredients, packaging, transport, energy and labour continuing, it revealed that procedures were in place to pass price rises on to its customers and deliver profit improvement plans into 2025.
Its portfolio of gluten-free loaves, rolls, and pancakes was extended in 2024 with the introduction of new Triple Chocolate Fudgy Brownies produced at its Scunthorpe facility. It rolled out a full brand refresh in the second quarter of this year, and unveiled a brand collaboration with Candy Kittens on a Rocky Road that it claimed has taken social media by storm.
Company directors were said to be looking forward to Q4 2025 which is to see the launch of “category-first innovations and the commencement of an anticipated major new UK retail partnership”.
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