€3.2m pretax loss for Largo Foods

Largo Foods, the Tayto crisps owner and potato processor, has reported a pretax loss of €3.2 million on turnover of €74 million for 2006, a year in which the company incurred costs from the acquisition and bedding down of the Tayto operation.

Largo Food Exports, which bought Tayto from C&C for €62.3 million in September 2006, invested in warehousing facilities at its plants in Ashbourne, Co Meath, and Gweedore, Co Donegal, in order to accommodate the Tayto acquisition, which also includes the King brand name.

The company incurred exceptional costs of €4 million last year and saw its bank interest costs more than double to €3.9 million as a result of the debt used to finance the deal.

According to reports filed at the Companies Office, the company's turnover on continuing activity was €65.9 million last year, while the turnover contributed by the Tayto acquisition for the final portion of the year was a further €8 million.

The total turnover of €74 million last year was 38 per cent higher than the €53.6 million turnover recorded in 2005, a year in which it made a pretax profit of €1.6 million.

However, the figure was short of the €80 revenue projected by Largo managing director Ray Coyle a year earlier.

Operating profit after exceptionals but before taking account of interest payments came to almost €580,000 last year, down from €2.8 million in 2005.

Raw materials prices as a percentage of sales increased last year. The directors' report noted that the group is exposed to commodity price rises and that it dose not actively manage this risk through hedging. But it said it would revisit the appropriateness of this policy should its operations expand.

Largo employs around 830 people. The food group's strategy is to build on its leading market position in the Irish snack foods market and grow its presence in the UK.