Operating profit at Cornwall-based Warrens Bakery has risen by more £2m on the back of strong sales growth.
Turnover at the business, which this year completed a Company Voluntary Arrangement (CVA), rose from £9.6m in 2021 to £12.5m last year, according to Warren’s latest filing at Companies House.
In Warrens’ accounts for the year ended 30 June 2022, the company reported that the 30% growth in turnover came as all its stores were fully open following the relaxation of Covid restrictions. Sales at its hospital sites continued to be down because of restrictions, however.
Margins had continued to improve, and overheads had been well controlled, reported the business, resulting in a “significant” increase in profitability.
Operating profit for the year was £2.8m, up from £471,000 the previous year.
The improved performance prompted the company to request making a final payment of £500,000 against its Company Voluntary Agreement.
Warrens had agreed a CVA, a process that enables a company to negotiate the repayment of debt rather than filing for liquidation or insolvency, with its suppliers and landlords in December 2019. The CVA followed the announcement of a major restructure that included shop and factory closures as well as redundancies.
The firm has fully complied with the terms of its CVA, with preferential creditors paid in full and unsecured creditors paid at a rate of 23.56p to the pound.
Referring to trading after the period covered by its 2022 accounts, Warrens said sales during the traditionally buoyant summer had been hit by the prolonged heatwave. However, in the period from September to the date of the accounts filing in January this year, sales growth had continued.
Warrens chairman Mark Sullivan told British Baker: “Post a successful streamlining initiative, Warrens has entered an exciting growth phase, where we will finalise our rebrand across the estate and also open a variety of new stores throughout the West Country and beyond.”
Warrens opened a new store in Torquay in July 2022 and plans to open a site at Bath Spa Station in its current financial year.