Fentimans, a Northumberland-based soft drinks and tonic water manufacturer, has reported a pre-tax loss of £655,708 for 2023. The challenging financial outcome is attributed to poor summer weather and the ongoing cost-of-living crisis, which have adversely affected sales.
The company’s turnover decreased from £42.1 million to £38.9 million over the year, according to accounts filed with Companies House. This marks a reversal from a pre-tax profit of £604,271 in 2022. The last time Fentimans recorded a pre-tax loss was in 2019, when it posted a substantial £5.1 million loss. Despite the overall downturn, UK sales during the Christmas period showed an improvement over the previous year, helping to mitigate the annual decline.
Fentimans faced an 8.6% drop in export gross sales, amounting to £17.5 million. The company has pointed to extreme regional weather events across Europe, a major market, as a contributing factor. In the UK, turnover fell from £20.1 million to £19 million, while sales in other international regions dropped from £21.9 million to £19.9 million. The board acknowledged the sustained impact of ongoing inflationary pressures across the market and noted that these conditions had weakened demand, particularly in export markets.
The board released a statement highlighting that 2023 presented continued unusual challenges against a backdrop of global uncertainty. The board stated, ‘Extreme regional weather events during the busy summer period, coupled with ongoing inflationary pressure faced across the market, has seen demand weaken – particularly in our export markets.’ They further observed that the group experienced significant pressure on input costs throughout the year, resulting in downward pressure on profit margins.
Economic conditions in key markets, including South America and Asia, have led distributors to reduce stockholding, further diminishing demand. In response to these adversities, Fentimans remains focused on investing in key international markets and building a robust network of distribution partners. The company expressed optimism about future growth, anticipating a return to international market expansion as trading conditions stabilise.
Despite the myriad challenges, Fentimans remains committed to strategic investments and believes in the potential for growth once economic stability is achieved. With a focus on expanding its distribution network, the company aims to overcome these temporary setbacks.
In summary, Fentimans has faced a difficult financial year in 2023 due to adverse weather conditions and the cost-of-living crisis impacting sales. Nevertheless, the company’s commitment to strategic investments and international market expansion reflects a positive outlook for future growth as conditions begin to stabilise.