Tony Galati’s Spudshed empire made $420 million of revenue in the year to June, but rising costs have put pressure on margins.
That revenue was up from $404 million in the 2020 financial year, according to financial documents lodged by the business, Vegie Bandits, to the Australian Securities and Investments Commission.
Profit in 2021 was $1.1 million, down from $6.7 million, and the company’s dividend was cut in half to $3 million.
Higher costs and tighter margins led to the lower profits, the annual report said.
The COVID-19 pandemic has pushed up input costs, Vegie said, including in transport and supply chain, particularly for imported goods.
Higher award rates for the 1,157 staff have also pushed up costs.
But Mr Galati opted to take a hit to the bottom line rather than pass on the costs, the report said.
“Our customers are also experiencing higher costs of living from pandemic driven inflationary pressures and low wage growth,” it said.
“As a result, we took a decision to limit increases to our margins during the period, in order to continue providing value to customers, and preserving important customer relationships which will have added value over the long term.”