A fall in revenue at Burton’s Foods has been driven by the disposal of the licence to produce Cadbury biscuits, and a drop in savoury biscuit sales.
Revenue at the Maryland and Jammie Dodgers owner fell 10% year-on-year to £259.6m in the 52 weeks to 31 December 2016, according to documents filed at Companies House. EBITDA fell from £38.8m to £18.5m over the same period.
In November last year, Burton’s ended a 30-year licensing deal with Cadbury owner Mondelēz International, selling the licence to Mondelēz for around £200m.
Although stating the deal “strengthens the company’s balance sheet and allows the company to continue to bake Cadbury biscuits for Mondelēz International’, Burton’s said the disposal had contributed to the loss in revenue.
Making Cadbury biscuits under a co-manufacturing agreement had contributed to a 4% drop in margins, added the company. Margins were also hit by increased promotional activity and increased commodity costs driven by the weakness of sterling.
Burton’s, which produces biscuits under the Fish’n’Chips and Cathedral City brands, said sales of its savoury biscuits had dropped following a 1.6% decline in the overall savoury biscuits market.
The company said the total biscuits market was forecast to remain “broadly stable”, and that there were a number of opportunities for growth.
“The markets in which the company operates continue to be highly competitive, with customers and consumers continuing to seek high-quality, contemporary biscuits which offer excellent value for money and form part of a balanced healthy diet,” it stated.
“The company continues to focus heavily on developing new products and reformulating existing products to meet these changing requirements.”