Karro Food Group secures £74m funding package to sustain growth period

Karro Food Group, the Malton-based supplier of British pork into the retail, trade and foodservice industries, has released a significant annual profit following a period of transformation.

Karro has posted an EBITDA profit of £8m for the year ended December 31, 2014, which represented an £11m EBITDA improvement on the previous year and the group’s first profit for many years.

To maintain this success and future growth, Karro has secured a £74m funding package from GE Capital and RBS Invoice Finance, providing additional capital to support the group’s UK and international expansion and acquisitions strategy.

Karro Food Group’s 2014 performance highlights include:

• An £11m improvement in EBITDA, the second consecutive year of delivery of EBITDA improvement of more than £10m
• Turnover of £528m, similar to the previous year
• The launch of a £10m capital investment programme, financed from cash generated by the business, into processing and production across its UK manufacturing facilities, including an £8m leading investment at its largest facility in Northern Ireland
• Further expansion of the group’s customer base at both national and international level

Di Walker, executive chair of Karro Food Group, said: “Following its acquisition from VION by private equity house Endless LLP in January 2013, Karro Food Group implemented a five year plan to transform the underlying performance of our business through operational improvements that could deliver value to both Karro and its customers.

“It is therefore extremely pleasing to announce that Karro Food Group will have achieved the targets set out in that plan namely to ensure Karro is fit for the future and firmly focused on growth - within just three years. This is an achievement reflected in these stand-out results and a clear recognition from our customers that the revitalised group is a very welcome market participant.

“Our firm focus moving forward is to continue this positive trajectory. We have an appetite to make acquisitions and this strategy will be supported by our recently announced £74m funding package.

“We also continue to be focused on organic growth and will further develop our retail and trade partnerships, as well as expand our international customer network in markets including Australia, China, Japan, Korea and the United States.”

Michael Kestemont, chief financial officer, noted that the second year of Karro’s profit growth had been realised in a year characterised by significant competitive pressure within the UK pork industry.

Mr Kestemont said: “€œWith ongoing support of our funding partners, Karro Food Group is confident that 2015 will bring significant EBITDA and cash generation progression, driven by further capital investment and continuous operational and commercial improvements across the group.

“The increasing success of Karro Food Group and its strong financial performance is giving both suppliers and customers the confidence to want to grow long-term strategic partnerships with the group, cementing our position as a leading player in the UK and international pork industry.”

Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →