Meal kits and online shop help Ottolenghi improve margins

Ottolenghi group has said diversifying its online product range means it is now operating at a higher earnings margin than before the pandemic.

During the year ended 31 March 2021 the company expanded its online shop with dinner boxes, meal kits and a tableware licensing deal.

However, three of its six trading sites were closed for 70% of the financial year, meaning turnover dropped by almost £13m to £7.8m and earnings before interest, taxes, depreciation and amortisation (EBITDA) fell £1.3m to £185,360.

Ottolenghi group said: "Presenting a positive EBITDA after this pandemic-hit year is a testament to the ability of the business to weather an exceedingly challenging trading environment.

"We have further diversified our product range this year through the growth of Ottolenghi Ready pouches, dinner boxes, prepare at home meal kits and a tableware licensing deal.

"All our costs were challenged, whilst ensuring we were able to continue delivering the exceptional level of product and service which our customers expect. This in turn means we now operate at a higher EBITDA margin than before Covid-19."

In May 2021 the company moved its production unit and online warehouse to a larger site in Holloway, north London, which has allowed it to support further expansion of its delis and retail product range.

The company took out a £3.7m Coronavirus Business Interruption Loan with OakNorth bank during the year, of which it has since repaid £1.5m.

In July 2021 Ottolenghi opened a Marylebone deli, which it said was trading well. Its Motcomb Street site closed permanently in December 2021 but a new deli will launch around the corner on Pavilion Road this month.

During the year, Ottolenghi disposed of its 50% shareholding in the operating of Scully's in St James', which is run by former Nopi head chef Ramael Scully.