Rising inflation and costs contributed to losses of almost £50m at the company behind the Harringtons pet food brand in its most recent financial year, it has been revealed.
The business behind North Yorkshire-based Inspired Pet Nutrition has posted pre-tax losses of £47.7m for the 12 months to 1 July 2023, after also losing £37.7m in the previous year.
Newly filed accounts for the Dalton group, which also makes the Wagg, Barking Heads & Meowing Heads, and AATU brands, show its turnover increased from £148m to £197.6m over the same period.
The average number of people employed by the company during the year increased from 355 to 436.
The official accounts come after Inspired Pet Nutrition issued a release last month saying it had passed the £200m turnover mark but gave no further financial details.
A statement signed by the board said: “Margins are under pressure due to inflation and our ongoing commitment to limit price increases has been passed on to our customers and consumers to ensure we remain in our affordable credentials while balancing margin recovery to allow for continued reinvestment in the business and brand.”
The business said its operating losses included £36.5m of amortization charges on acquired intangibles, £6.7m of depreciation and £2.9m of exceptional items.
It added: “Profitability was hampered by increased operating costs including equipment and labour.
“This, coupled with significant raw material and packaging inflation, makes for a challenging trading environment.”
The company also said: “The directors remain of the opinion that in order to remain a low-cost, flexible and high-quality manufacturer, the group must continue to invest in new technology and automation.
“These Capex and stock investments are financed from internally generated funds, strict working capital controls and external borrowings from dedicated facilities.
“To keep up with the demands and lower wet food and dry costs for the facilities, the group will further invest in specific capital projects to drive efficiency, capability and capacity.”
Inspired Pet Nutrition, which also has a base in Kinmel, North Wales, can trace its origins back to 1923 and is headed by Richard Page, grandson of the business founder, James R Page.
As of 2020, the company is majority owned by London-based private equity firm CapVest.
On its future, the business said: “The directors remain confident that they can continue to grow the business organically and through strategic acquisitions in what remains a challenging, unpredictable economic environment.
“The experience of significant channel change, demands for changing product formats and value propositions along with significant inflation and broader macroeconomic and geopolitical uncertainty will continue to require dynamic strategies across group market.”
