Insurance payout helps Roberts Bakery bounce back to profit after Northwich fire

Insurance recoveries helped Roberts Bakery bounce back to profit in the year after the devastating fire at its Northwich site.

The business, which manufactures branded and own label bread, morning goods, and biscuits, reported turnover of £76.1m for the year to 31 August 2024 – down £19.9m compared to the year prior. EBIDTA, however, boomed from £200k to £24.3m thanks to insurance recoveries, according to accounts filed for Frank Roberts & Sons on Companies House.

On 5 June 2023 a fire swept through the Red Rose Bakery section of the Northwich site resulting in a significant reduction in bread production capacity, cutting it by nearly two thirds. Utilising good relationships with other bread manufacturers, the business was able to ensure a continuous supply of bread, although several products could not be sourced from third parties resulting in lower sales.

The recently filed accounts reveal that Roberts was covered for the loss of margin as a result of the fire and the cost of the factory rebuild.

The rebuild involved ‘the most important operational overhaul in decades’ for the business as it looked to maximise efficiency and de-risk operations. This included relocating Little Treats biscuit production four miles up the road to Winsford and splitting the two bread plants at Northwich to make them independent of each other. Ilkeston in Derbyshire, meanwhile, continues to focus on artisan and specialised bread products.

At the time of signing the accounts, the company had completed the rebuild process to restore production capacity and had settled the claim with insurers for a cash payment of £19.9m for a full and final settlement, which was received in December 2024. This additional cashflow will allow for EBITDA enhancing investments to be made and will support the business’ position whilst the brand market share is being rebuilt, it stated.

Roberts described the UK wrapped bread market as a “tough trading environment with the increasingly competitive landscape putting pressure on suppliers to deliver high quality products at competitive prices”, something which is exacerbated by the impact of commodity price inflation.

However, it noted it seeks to manage market risk by adopting a successful strategy to focus the Roberts brand on innovation and sustainability in order to differentiate it from competitors.

This included the firm’s biggest ever marketing campaign, ‘back to our best’ last year, which focussed on promoting the taste and quality of its products as well as celebrating the reopening of the Northwich site. Another focus, as explained by Julia Banton in an interview with British Baker, will be expanding Roberts Bakery’s presence in added value products, with its Digestion Boost serving as one example of this – an item customers were “desperate to get their hands on” during the period of recovery from the fire.