Genesis Bakery takes £4m hit from pandemic's impact on food service sector
THE new owners of the former McErlain’s Bakery in Magherafelt took a £4 million hit from the impact of Covid-19 on the north’s food service sector.
Hatch Brothers, which bought the business out of administration in August 2018 for £1.85m, reported a pre-tax loss of £270,000 for the year ending August 31 2020.
Headed by former Tayto boss Paul Allen, the company now restyled as Genesis Bakery, recovered well in its first trading year under its new owners, recording a pre-tax profit of £1.1m and embarking on a recruitment drive.
Although the bakery continued to expand its workforce last year to around 311 people, new accounts just published by Companies House have detailed the impact of the pandemic on the bakery.
The report, signed off by Mr Allen, estimated a reduction in sales to the food service and ‘food-to-go’ sectors in excess of £4m.
It followed the widespread closure of hospitality businesses throughout the year, with footfall also well down in key city locations, where food-to-go products traditionally thrive.
The company did manage to improve sales to Britain by around £1.5m for the 12 months ending August 31 2020, but sales to Europe, which includes cross-border business, collapsed by £3.3m to just £1.3m.
Total sales for the 12-month period were down six per cent to £20.1m, with pre-tax profits slipping into the red by £270,000.
The accounts filed with Companies House do not include the sales figures for the latest lockdown periods.
The report reveals that the bakery business availed of government grants and furlough support in the region of £513,000 during the reporting year.
Hatch Bros is now in its third year of trade since buying the failed McErlain’s Bakery business in a pre-pack sale.
The business collapsed into administration over the summer of 2018, owing creditors around £4.3m.
Mr Allen’s deal to buy the business saved around 260 jobs, but the administration process left around 200 unsecured creditors out of pocket.