THE owner of the former McErlain’s Bakery in Magherafelt has revealed the business has changed how it procures key ingredients in response to the war in Ukraine.
Hatch Brothers, which bought the business out of administration in 2018, and now trades as Genesis, said the changes were made “in order to maintain security of supply for production and therefore for customers”.
The Co Derry company said it continues to invest in resources to monitor movements in commodity prices, particularly where they impact key ingredients such as butter and flour, both of which it said had been affected by Russia’s invasion of Ukraine.
Genesis primarily trades in Irish breads, tarts, cupcakes and seasonal items such as mince pies.
The supply chain changes were outlined in a report published alongside Hatch Brothers’ latest company accounts, which reveal the Magherafelt bakery operation recorded a 6% uplift in revenue to £22.9 million last year.
Costs were also up by around 4%, but the bakery operation saw its pre-tax profit rise more than three-fold to just under £865,000 for the year to August 31 2023.
That was still below its pre-Covid performance of £1.3m in 2019.
The accounts revealed the operation cut staff numbers from 298 (244 full-time equivalent) workers in 2022, to 259 (171 FTE) employees last year.
The bakery had employed around 260 people when it collapsed in 2018.
Former Tayto boss Paul Allen bought the business out of administration in an August 2018 rescue deal.
The 2023 accounts state the debt associated with the original acquisition of the business was repaid in full in the second half of 2023.
Mr Allen, who stepped down as the Tayto Group’s chief executive in 2019, owns Hatch Brothers with his wife Nicola.
In his report assessing the performance of the business in the year to August 2023, Mr Allen said the company had also made changes in the post-Brexit trading environment.
“New supply chain management protocols have been developed and the company now retains more raw materials and work in progress both on site and in frozen storage in order to avoid shorting customer orders.”
In an upbeat trading assessment, Mr Allen said the company continued to invest in innovation.
“During the year under review, the business launched a number of truly innovative products, at foot of significant research and development.
“Some of these products, retailed under customers’ own brands, have won awards and have gone on to sell in stores worldwide.
“The business is profitable, cash generative and continues to invest for the long-term growth of the company.
“The majority of investment has been in training, equipment and fleet.”
The company said new machinery had increased productivity and “reduced the need for several repetitive tasks, which has brought benefits by cutting required hours, which is essential in what is currently a very challenging labour market”.
