UK bread producer Hovis has published its annual report for the 52 weeks ended 28th September 2024, revealing a £38 million decline in yearly revenue.

Hovis Limited earnings before interest, taxes, depreciation and amortisation (EBITDA) were £18.7 million, down from the prior year’s £20.9 million, and the company said this was a result of “lower revenues and higher distribution expenses”.

Revenue reached £439.6 million, a £38 million decrease from the 2023 rate of £477.6 million. Gross profit was down £7.3 million, reaching £82.2 million.

Hovis reported an operating loss of £3.5 million in 2023, but this nearly doubled in 2024 to reach £6.9 million.

The company have considered the “risk” associated with reducing demand for pre-packaged bread, it said, but “continued strategic partnerships, product innovation and cost management” will aim to mitigate this and the impacts on EBITDA.

Hovis also highlighted that the “level of volatility remains significant” within wheat and energy cost areas, stating that “timely cost recovery remains important”.

In the report, Hovis said that a potential third party had confirmed that discussions were being held with Endless LLP regarding a possible transaction, namely a merger of the Kingsmill and Hovis brands. Hovis confirmed that these discussions were ongoing, with no formal Sale and Purchase agreement signed.

It went on to say that it was unlikely that the transaction would be completed during the current going concern period, and said that even if the transaction were concluded, the directors were of the opinion that the group structure and the Hovis legal entities would be maintained for tax and operational purposes throughout the going concern period.