Blog: Yoghurt maker Rachel's lifts lid on impact of retail rift
Dean Best | 5 January 2012
Rachel's Dairy, the UK organic yoghurt maker, has revealed just how much a delisting by a major UK retailer can cost a business.
The company's results for the year to December 2010 show it had to write off GBP978,000 of goodwill after an unnamed customer decided to stop selling certain milk products.
The results, filed at Companies House just before Christmas, show how the company performed in a year in which it had two owners. Rachel's was sold to French dairy giant Lactalis by US dairy group Dean Foods in August 2010.
During the year, Rachel's sales grew 20.7% to GBP25.9m. The company's gross profit was up 22.8% at just under GBP11m.
However, Rachel's distribution costs and administrative expenses, including the goodwill charge, meant it made an operating loss during the year of GBP395,000 - compared to a GBP1.1m operating profit in 2009. In all, Rachel's made a net loss of GBP316,000 in 2010. A year earlier, it made a net profit of GBP764,000.
In its report, Rachel's said it had grown its sales and market share despite "difficult economic conditions" and said its brand would benefit in 2011 from its first TV advertising campaign.
Reflecting on its takeover by Lactalis, Rachel's directors also stated: "The acquisition ... has provided a strong platform for the future growth of the business as consumers become increasingly aware of the Rachel's brand and product range."
Lactalis is family owned and therefore is not obliged to report financial results. It will be some time before we get to see if Rachel's has thrived in the first full year of French ownership.
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