Medina Dairy made a pre-tax profit of £1.35m in the year to 31 October 2020, after making a £10m loss the previous year.
The company’s turnover totalled £158.6m, a decrease of 5% from £166.7m in 2019. The pandemic was a major factor in this reduction, with trade affected and staff furloughed.
The cost of sales also fell in 2020, which helped to offset the reduction in turnover.
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One of the company’s key performance indicators is the value of sales for each employee. This figure increased to £774 a head during the financial year, an increase of £222 a head compared with year-earlier levels. However, net liabilities rose to £14.3m, compared with £12.9m the previous year.
The company is still in the process of a potential merger with Freshways, which is referenced in the directors’ report.
Sheazad Hussain, Medina Dairy chief executive, said: “The directors have adopted the going concern basis in preparing these accounts after assessing the principal risks existing at this time.
“They have considered the likelihood of Competition and Markets Authority [CMA] clearance of the merger and, with the effects of Covid-19 receding, the directors are confident their arrangements through the agreement, as well as other options to manage costs and liquidity, provide the business with a sustainable future.”
The auditor’s report to the accounts stated a material uncertainty which may cast significant doubt on the company’s ability to continue as a going concern.
Andrew Wright, senior statutory auditor at Deloitte LLP, said in the report: “Given the merger has not yet completed and therefore synergies have not been realised, there exists uncertainty related to events or conditions that may continue to affect performance.”
Freshways Merger
Medina has signed a merger agreement with Freshways, subject to approval from the CMA.
Medina is yet to update its confirmation statement at Companies House, which could be indicative of a potential change or addition to its directors as part of the potential merger.
The CMA first launched a merger inquiry on 2 February 2022, and has since revoked the initial enforcement order.
