Andrew Hayes, who set up the group in 2011, said the strategy of the business is to focus on traditional British foods, with “significant growth” being sought both by organic means and through acquisitions.
Mr Hayes is a former professional rugby union player and former managing director of frozen food business Aunt Bessie’s, whose products include Yorkshire puddings.
Abbeydale Food Group, which also includes Saxon Quality Foods, a prepared potato business in Scunthorpe, and Chapel Foods, which makes the Denby Dale Pie branded range, recently purchased mushy pea maker Pie Toms in South Kirby.
Mr Hayes expects the group’s £6m turnover to reach £8m in its current financial year. The group, whose customers include Tesco, Sainsbury’s, Asda, Morrisons, Waitrose, the Co-operative, Booths and other food manufacturers, has also recently bought a new 18,000 sq ft factory in Scunthorpe, where Saxon’s potatoes will now be produced.
Its existing 12,000 sq ft factory, which Mr Hayes said is “in poor condition”, will be closed.
Mr Hayes said that Abbeydale bought Saxon and Chapel Foods out of administration in 2012.
“They were significantly loss-making. At the end of the first year we got them to break even and at the end of the second year, which was two weeks ago, we made a profit, and this year we are coming into we should be making significant improvements,” he said. “The synergy benefits of pulling three businesses together are that you get better prices.”
Pie Toms, Mr Hayes said, is a profit-making small business, which was bought from its directors. Saxon employs more than 60 people, while Chapel Foods has 12 staff and Pie Toms has 10.
Mr Hayes said: “Headcount has been pretty steady for a good few years but we will increase employment significantly, especially at Pie Toms and Saxon because the growth plans at those businesses are quite significant.”
Mr Hayes said the plan is to complete a further acquisition in the third quarter of the group’s financial year. “The hardest thing is getting funding at the moment,” said Mr Hayes. To buy Pie Toms and the new factory in Scunthorpe required funding of more than £1m.
This was met by a Regional Growth Fund grant via North Lincolnshire Council, by funding from Tata-owned UK Steel Enterprise in return for a small equity in the group, by Abbeydale shareholders and by a funding line from Lloyds TSB.
The group also faces other challenges including rising meat prices, as the Chinese and Indian markets move to a protein-based diet, poor harvests due to bad weather and a dent in consumer confidence following the UK’s horsemeat scandal.
Mr Hayes said the pie business suffered a knock to sales when the news broke that tests found horse DNA in beef products in many of the UK’s biggest food firms and supermarkets. “We only buy from two slaughterhouses in the UK, in Pontefract and in Scotland, so we can see the primal piece of meat, the chuck roll it’s called. But the consumers don’t know that.”
He added the firm’s products have been tested and do not contain horsemeat, but consumers have been turning away from ready products regardless.
“Now consumers will come back, because they have to come back. People don’t have time to cook from scratch they rely on pre-made meals and pies for a couple of nights a week,” said Mr Hayes.