Weetabix sale helps snack maker Wholebake slash loss

Wholebake, the company behind snack brands Brynmor, Nine and Bounce, has significantly cut its loss after selling its cereal business to Weetabix, according to newly-filed accounts.

The manufacturer, which is headquartered in the Welsh town of Corwen, Debighshire, saw its pre-tax loss slashed to £1.8m in the year ending 30 March, 2024, down from £6.7m in the 12 months before.

Wholebake’s turnover also increased, hitting £52.3m during the 12 months from £45.6m in the previous period.

The company’s improved performance followed the sale of its own-label cereal business to Weetabix in December 2023.

The move was part of a broader turnaround strategy which the firm said would allow it to focus solely on producing snack bars.

The sale followed three years of widening losses as the group battled the pandemic, Brexit-driven labour shortages and significant input cost inflation.

Deeside Cereals has continued to operate as a stand-alone business since the Weetabix acquisition.

The takeover helped Weetabix’s sales increase by almost 10 per cent to $267.1m (£212.9m) for the six months to March 31, 2024.

Wholebake hails ‘significant’ improvements

In a statement published to Companies House, Wholebake said: “Trading and operational performance improved significantly during the year, delivering a £5.1m improvement in the operating loss from £6.4m in the period ending 2023 to £1.3m in the period ending 2024 and an EBITDA [earnings before interest, taxes, depreciation, and amortisation] before management charges of £3.9m, alongside increased focus on health and safety, safe and efficient factory operations, innovation and customer service.

“Sales turnover year on year improved around 15 per cent to £52.4m, increasing volumes with all key customers.

“Gross margin improved year on year due to improved factory efficiency and sales price increases to recover increased input costs, restoring stability to the company.

“The prior year trading challenges meant the company started the year with limited liquidity.

“In the early part of the year the company’s main institutional shareholders provided some extra funding and the group renegotiated its banking position, obtaining waivers for covenant breaches in September 2023, with revised covenants in place until March 2024 which have all been passed.

“Following the end of the financial year the group returns to its original covenant tests. The bank continues to support the company and all subsequent banking covenants in the year and thereafter have been passed as the company has returned to profitiabilty.

“By the end of the year suppliers were consistently being paid to terms and throughout the period of difficult trading the company continued to pay debt services as and when it fell due.”