Temperature-controlled food storage and distribution business Reed Boardall saw pre-tax profit fall by two thirds last year as the pandemic lockdowns and Brexit created an “extremely challenging environment” which saw food service sector volumes plummet and costs escalate.
According to its latest annual results to 31 March 2021, whilst the company saw turnover rise by 2.1% to £69.8m (2020: £68.4m), its pre-tax profit fell 65% to £705,393 (2020: £2m).
The Yorkshire-based firm, which runs a fleet of 196 vehicles and employs around 800 staff at its single site in Boroughbridge, attributed the decline in profits to the impact of Covid-19 lockdowns and to Brexit-related challenges.
In a statement, Reed Boardall said this week: “While the group saw higher volumes through its cold store, there was a decrease in its ancillary blast freezing, picking and packing services due to Covid.
“In addition, Reed Boardall was faced with a fall in expected sales value growth in its transport division in the face of an extremely challenging environment with escalating costs proving difficult to recover in a competitive market. Along with the rest of the sector, the company also suffered from a significant reduction of activity in food service as outlets experienced multiple lockdowns.
On the upside, the company completed a 12-month multi-million pound project to expand its dedicated, 55-acre single site operation in North Yorkshire, which Reed Boardall claims is the most extensive and modern cold storage facility in the country with a capacity to 168,000 pallets.
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Marcus Boardall, chief executive of Reed Boardall, said: “After more than 25 years in the industry, there’s no doubt that 2020 was an extremely challenging year and probably one of the most difficult and frustrating we have ever seen as we all fought to cope with the impact of the Covid outbreak, dealing with increased retail demand and a steep fall in food service, alongside staff being off sick or self-isolating and the restrictions of working under social distancing measures.
“While it is satisfying to see a rise in our average store utilisation, particularly given our recent cold store extension, the hike in costs post-pandemic continues to add pressure to our operations.
“However, looking forward, we expect the rise in volumes to continue and we are fortunate to have the increased capability of our enlarged cold store which will help alleviate pressure on capacity.
“Throughout the disruption of the last couple of years, our single site model has more than proved its worth as we have been able to adapt quickly to customers’ changing needs and continue to provide a swift and reliable service to food processors and retailers nationwide.”
Finance director Sarah Roberts added: “Unfortunately, it has been another year full of uncertainty over Covid and the difficulties of servicing though lockdowns and labour shortages, together with the still unknown impact of Brexit.
“As a long-established business with a solid customer base, we are continuing to invest in our operation to keep us at the forefront of the sector, including focusing on improving training, recruitment and staff retention to ensure we have the team we need.
“The UK is fortunate to have such a robust food supply chain and we know that, working together with our customers, we will be able to overcome the current issues.”
