Providing food supplies to communities hit by US hurricanes helped Scottish food group Baxters cut its annual loss.
Contracts with the US military and supplying rations to disaster areas were key to a 44% rise in operating profit after exceptionals to £22.3 million (2024: £15.5m) and a 3% rise in revenue to £387.7m for the year to 29 March 2025.
However, £29m in financing costs at WA Baxter & Sons contributed to a pre-tax loss of £7.2m, compared with a loss of £13.6m in the previous year.
Its Wornick Foods subsidiary in the US has a long-held deal with the military and also provides rations for disaster relief.
The company’s accounts state how the “largest influence on our results was our US business” which is “largely due to our military contracts which have seen large increases in response to the hurricanes which devastated various parts of America during the latter part of 2024.”
Baxters provided 414,000 meals to support relief efforts in Milton and Helene.
The accounts state: “The significance of our military partnerships lies in our ability to unlock high-value opportunities. It serves as a powerful endorsement of our expertise and enables us to engage in initiatives that demand the highest standards of performance and reliability.”
However, the rest of the North American business “continues to battle against tough trading conditions and lower demands from our co-manufacturing partners.
“With a clear strategy in place to capitalise on our assets, expertise and commercial relationships, non-military growth continues to be of key focus to our senior management team.”
The company said this was underlined by securing important customer wins with blue-chip organisations and leveraging its expertise in pet food to grow the US business.
“With a pleasing trend towards human-grade meals for pets, we are perfectly placed to support our customers in producing real quality food for the well-loved animal members of families across the United States.”
In the UK, a “key challenge” for the business is meeting the “seemingly continuous treadmill of ever higher input costs.”
It notes that while inflation has settled from the spike in the aftermath of the Covid pandemic, the business will now have to navigate higher tax and recycling levies.
With large increases to national insurance and the national minimum wage, “maintaining a sustainably profitable business will fall to our tenacious European team. We are confident in their ability to do so but it is another set of challenges to overcome for UK based manufacturers such as Baxters.”
Dividends of £1.093m was paid to shareholders in the year, more than double the £407,000 in the previous 12 months.
The directors did not propose a dividend for the year ended 29 March 2025. A dividend of £1.093m was paid in respect of previously recommended dividends from prior accounting periods
The highest paid director, assumed to be chairman and chief executive Audrey Baxter, received remuneration of almost £1.9m, an increase from about £1.7m.
During the year the company completed a sale and leaseback deal on facilities in Oregon and Kentucky which netted it £34.7m, of which £25.9m was used to pay down its bank borrowings.
The company’s directors include former Scottish Tory leader Baroness Davidson and the former hotelier Peter Lederer.
As well as a wide range of Baxters branded products it owns the ready meal maker Fray Bentos and Manor Vinegar.
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