Margins contracted and board pay outpaced sales

Topline growth of 10% is steady, but the real story is the operational leverage. Operating profit surged by over 40% as administrative expenses were held to a mere 6% rise. A notable observation is the headcount, which more than tripled over the year, suggesting a major consolidation event that outpaced the organic revenue growth.

Turnover was essentially flat, but an operating profit was recorded as administrative expenses contracted and the workforce slightly reduced. The period also saw an increase in board pay, with the package for the highest-paid director more than doubling. Ernst & Young signed off with a clean opinion, noting a going concern runway to April 2027.

A classic margin squeeze under ultimate KKR ownership. Sales barely moved, but a 23% contraction at the gross margin level expanded operating losses fivefold. The cost base remained broadly flat, with administrative expenses and headcount remaining static during the period under review.

Gross profit expanded steadily, but operating profit still fell by a third. The recent acquisitions of Innate-Essence and Frobishers Juices likely explain the disconnect between the gross and operating lines. Deloitte flagged two key audit matters in their report.

A modest 5% rise in revenue was entirely outpaced by an 18% jump in both headcount and administrative expenses, reducing operating profit. The related-party disclosures are worth a glance, detailing substantial work performed for a family member alongside property rentals to a director pension scheme.