Karro delivers £10m turnaround in first year of operations
Karro Food Group, one of the leading suppliers of British pork into the retail, trade and foodservice industries, has announced that it has delivered an EBITDA improvement of £10m in its first year as an independent business. Karro’s 2013 financial results mark a significant milestone in the company’s turnaround strategy, bringing the business close to EBITDA break-even point, following its acquisition from VION by UK-based private equity house, Endless LLP, in January 2012.
Karro Food Group’s 2013 performance highlights include:
- A £10m improvement in EBITDA, bringing the business close to break-even point at -£3.3m
- Turnover of £533m
- Securing of a £60m funding package from GE Capital, providing additional working capital and ability to invest into the business
- Rebalancing of the Karro business to expand the customer base and enter new markets
Di Walker, Karro executive chair, said: “We are extremely pleased with the progress made last financial year – our first as Karro. We delivered a £10m improvement in EBITDA, well-ahead of plan, despite an extremely tough pork market characterised by margin pressures and escalating raw material costs.
“We now have the right foundations in place to operate an efficient, effective business, based on strong partnerships with customers and our farming suppliers. I’m confident that this gives us a strong basis on which to continue to transform the underlying performance of our business and deliver excellent product quality and service levels to our customers.”
Karro’s turnaround strategy has included the following elements:
- Expansion of retail, food service and trade customer bases, with significant new relationships secured
- Extensive investment in manufacturing capabilities, including £2m into bacon slicing facilities at Karro’s Scunthorpe site and a £500,000 upgrade to the gammon processing line at its Malton site
- Strengthening of the operational, commercial and technical capabilities of the Board and management team, including the appointment of Di Walker as executive chair and Brian Stein as non-executive director
- Refocusing of the business towards areas of processing and manufacturing strength, materially transforming underlying business performance
- Development of close, strategic relationships with main farming partners, and expansion of local farmer supplier base around processing sites
Di Walker continued: “We are now 18 months into a five year turnaround plan and continue to make extremely good progress against that plan in 2014, with a focus on the ongoing development of our strategic retail and trade partnerships, and the expansion of our export business in the USA and China. I’m pleased to report that we are well on track to deliver a further £10m EBITDA improvement in 2014, which will see the group generating profit for the first time in many years.”