Transformation leads to profit for Karro
Pork supplier Karro Food Group has delivered a significant annual profit following a period of transformation.
It has posted an EBITDA profit of £8m for the year ended 31 December 2014, representing an £11m improvement on the previous year and the group’s first profit for many years.
The group’s turnover was £528m, similar to the previous year.
The company has had a tumultuous year – securing a £74m funding package from GE Capital and RBS Invoice Finance to support UK and international expansion and an acquisitions strategy in May, while in March it laid off 141 members of staff.
It also launched a £10m capital investment programme, financed from cash generated by the business, into processing and production across its UK manufacturing facilities, including an £8m leading investment at its largest facility in Northern Ireland
Di Walker, executive chair of Karro Food Group, said: “Following its acquisition from Vion by private equity house Endless LLP in January 2013, Karro Food Group implemented a five-year plan to transform the underlying performance of our business through operational improvements that could deliver value to both Karro and its customers.
“It is therefore extremely pleasing to announce that Karro Food Group will have achieved the targets set out in that plan – namely to ensure Karro is fit for the future and firmly focused on growth – within just three years. This is an achievement reflected in these stand-out results and a clear recognition from our customers that the revitalised group is a very welcome market participant.
Walker added that the results would enable Karro to expand in the UK and internationally.
“Our firm focus moving forward is to continue this positive trajectory. We have an appetite to make acquisitions and this strategy will be supported by our recently announced £74m funding package.
“We also continue to be focused on organic growth and will further develop our retail and trade partnerships, as well as expand our international customer network in markets including Australia, China, Japan, South Korea and the USA.”
Chief financial officer Michael Kestemont said that the second year of Karro’s profit growth had been realised in a year characterised by significant competitive pressure within the UK pork industry.
He said: “With ongoing support of our funding partners, Karro Food Group is confident that 2015 will bring significant EBITDA and cash generation progression, driven by further capital investment and continuous operational and commercial improvements across the group.
“The increasing success of Karro Food Group and its strong financial performance is giving both suppliers and customers the confidence to want to grow long-term strategic partnerships with the group, cementing our position as a leading player in the UK and international pork industry.”
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