The organic vegetable box company Riverford doubled its dividend to its founder, Guy Singh-Watson, to £850,000 last year and tripled its workers’ bonus pool to £2.4m despite a dive in profits.
Sales rose 1% to £110.8m in the year to 30 April 2022, managing to top the pandemic boom. However, the company said that trading conditions and cost pressures this year and next could be some of the worst in its 36-year history after profits dived 56% to £5.2m.
Riverford, which delivers organic vegetable boxes to 200,000 homes, said profits had been hit by increased marketing costs and pay rises so that it became an accredited real living wage employer, as well as the shift to fully home-compostable packaging. The company said the new packaging had added £700,000 to costs.
Singh-Watson owns 23% of the company with the remainder owned by an employee trust which pays out to workers via a profit share. He received a £420,000 dividend in 2021 and £850,000 last year and the trust also paid him £624,000 for a further 3% of his shares in the business. The employee trust initially bought 75% of the business in 2018.
Workers received a £2.4m share of profits, which the company said was three times the amount paid the previous year, although it was shared among a greater number of staff.
“We emerge from Covid into an unsettled world,” wrote Rob Haward, its managing director, in the accounts. “The full effects of Brexit are still unknown, the world has a nasty Covid hangover and we are experiencing a war in Europe. All of this has created unsettled conditions for business and a cost of living crisis for consumers.
“The next few years are going to be unpredictable to say the least. Indeed, we feel that the next two years, trading conditions and cost pressures could be some of the worst we have seen in our history.”
Riverford said it faced more competition as supermarkets and small businesses alike had invested in home delivery during the height of pandemic restrictions when many shops were forced to close.
However, the company said “our future is bright” as it predicted more shoppers would want to spend in a way that did not contribute to “making the problems facing the planet and humanity worse”.
The company is aiming to use 100% electric delivery vans by 2025, rising from 10% to 70% this year alone, and will double its solar panel capacity across its four sites to 810KW to help power operations.
Riverford is also experimenting with different types of farming – including mixing nut orchards and livestock, and a plan to plant 5,000 more trees this year, adding to the 1,600 already in the ground. “Working with our farmer friends, we want to set out a blueprint for how the UK should farm in the future, for the future,” Riverford said.