A record year of investment has seen net debt at Samworth Brothers reach £190m, according to its latest accounts.
The investments are paying off though as the business also reported a 44% leap in operating profit.
In newly filed full-year accounts for 2024, the Leicestershire-headquartered savoury pastries and food-to-go giant – which has a brand portfolio that includes Ginsters, Higgidy, Soreen, Dickinson & Morris, Urban Eat and West Cornwall Food Co. – reported capital expenditure of £87m.
This was a record high for the third straight year at the fourth-generation family-owned group, during which time it has spent a total of £228m.
“This significant three-year investment programme will strengthen the foundations of our business for generations to come and is spread across a number of projects that will deliver expanded capacity, more efficient equipment and more environmentally friendly vehicles for our distribution business,” commented Samworth Brothers Group CFO Charles Noble.
The investments in 2024 included installing a new data platform plus supply chain and security tools, moving its Food For Now team into a new 45,000 sq ft factory at Radar Road in Leicester, expanding and upgrading its nearby Bradgate Bakery including a new staff restaurant, and implementing new refrigeration equipment in its Cornwall site. Additionally, Samworth Brothers’ venture capital arm Perfect Red led an investment round to raise £3m for healthier doughnut brand Urban Legend.
The Bradgate Bakery expansion is to be completed this year with new solar panels installed, while new lines and facilities are being added in Cornwall.
As a result of these future-proofing expenditures, the company’s borrowings ballooned to £190m last year having been at just £60m in 2022. To ensure sufficient debt capacity, Samworth Brothers said it has increased its multi-currency credit facility from £150m to £190m, with £140m drawn on it at the year end.
The accounts showed that revenues improved by 6% to £1.7bn, supported by new business wins and the acquisition of premium food-to-go supplier The Real Wrap Co. Noble revealed how selling price increases were less pronounced than the previous year, with significant effort applied across the group to mitigate rising input costs.
Gross margin recovered from 17.6% the year prior to 18.3% in 2024, thanks to a combination of price increases, product reformulation, and operational improvements. This afforded a 44% jump in operational profits (before exceptional items) up to £62m.
Non-recurring costs totalling £18.7m were incurred, however, including a £16.6m non-cash charge due to an impairment of goodwill relating to the transfer of the trade and assets of Higgidy in June 2024. Samworth directors said they “remained supportive” of the underperforming savoury pastry brand, which continued to update and relaunch its pie and quiche ranges last year.
Ginsters, meanwhile, was noted to have recorded a record year of value and volume growth, with Soreen also highlighted for its £2m marketing campaign.
“Looking ahead to 2025, we see new challenges on the horizon ranging from substantial labour inflation and the potential effects of global tariffs (impacting us and our customers), and continued geopolitical turbulence that will do little to boost consumer confidence,” said Noble.
“However, as a family business with a long-term outlook, we will continue to invest in our people, processes and equipment, which together with the ongoing commitment of our colleagues means we are well placed for another successful year ahead,” he added.
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