Hovis: Losses widen amid Kingsmill merger talks
Losses have widened at bread maker Hovis amid ongoing merger talks with the owner or rival Kingsmill, it has been revealed.
Hovis, which is backed by private equity firm Endless, saw its pre-tax losses go from £3.6m to £4.7m in the year to 28 September, 2024.
New accounts filed with Companies House also show its revenue totalled £446.8m for the 12 months, down from the £489m it reported for the prior year.
The results come after it was confirmed in May that Associated British Foods (ABF) entered talks to merge its Kingsmill brand with Hovis.
At the time, ABF said the talks had been prompted by a “very challenging” market for its products.
In the prior month, ABF reported an operating loss for its subsidiary Allied Bakeries, which makes Kingsmill products.
Hovis battles ‘significant price inflation’
A statement signed off by the board said: “The group has achieved positive financial progress despite continued tough trading conditions.
“This is credit to the hard work and dedication of our fantastic Hovis colleagues across our bakeries and distribution centres who ensure our quality and service is unmatched in the market.
“The group financial results reflect a further increase to EBITDA [Earnings Before Interest, Taxes, Depreciation and Amortisation], despite a reduction in turnover.
“These results highlight our focus on managing the cost base in a highly competitive market and demonstrating good progress during the year which will continue into 2025.”
Hovis added: “Overall bread share remained stable, despite significant price inflation and the on-going cost-of-living crisis.”
Allied Bakeries was founded in 1935 by Wilard Garfield Weston, while Hovis was created in 1890 in Stoke-On-Trent.
The bakery was the forerunner to ABF. Allied Bakeries merged with Weston Foods in 1939, and the company name was changed to Associated British Food in 1960.
ABF owns a diverse range of brands, from Primark to Twinings Ovaltine and British Sugar.