Volumes declined by 2.9% at Hovis in the latest financial year prior to its merger with fellow loss-making bread manufacturer Allied Bakeries.
Filings for the year ended 27 September 2025 showed operating losses had deepened by almost double, going from £7.3m to £17.2m. Revenue was down 3.8% to £422.9m, while EBITDA more than halved from £18.3m to £9m.
Despite what it called an “especially challenging year with difficult trading conditions” throughout the year, the 140-year-old bread brand reported its gross margin remained relatively stable (18.6% in FY25 vs 18.7% in FY24). Overall bread share also remained stable, with Hovis noting it was the only bread brand that ranked either number one or two in every UK region.
The company said the turnover and EBITDA declines had been driven by the cost-of-living crisis, along with retail pressures and cost increases of commodities. It also highlighted a consumer shift from traditional bakery categories to alternatives – something Warburtons had capitalised on to deliver 4.2% volume growth in its results over a similar period.
Hovis declared innovation was a key priority to help accelerate growth, with bread and bakery occasion launches over the year including new sub rolls and loaves. It has since ventured into the burgeoning wrapped sourdough category with two cobs. Hovis noted its major innovation of 2024, the Farmhouse Batch loaf, was one of its best performing new products last year.
A focus area for its commercial team was strengthening customer partnerships, such as a strategic deal agreed last year with a leading UK bakery retailer that was said to have helped grow market share. In addition, a number of third-party suppliers have been onboarded as part of logistics consolidation, while in 2025 Hovis secured a multi-year contract to supply private label bread products to a major grocery multiple with which it had an existing relationship.
To counter ongoing volume and inflationary headwinds, the company accelerated its Cost Out Programme which focusses on structural cost reduction and network optimisation. It also commenced the rollout of AI and machine learning capabilities at multiple sites through a partnership with IntelliAM, supporting a move to a predictive and preventative strategy of production. By utilising real time condition-based monitoring and advanced data analytics, Hovis said it was now more accurately assessing asset performance and delivering reductions in planned maintenance activity and overhead costs.
According to Allied Bakeries owner Associated British Foods, last week’s completed acquisition of Hovis is set to create a “sustainably profitable UK bakeries business for the long term with an enhanced market position” – the merged companies have been renamed as Hovis Bakeries.
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