Pallas Foods more than doubles pretax profit to €10.7m

Pretax profit at the main firm in the country's largest food service wholesaler, Pallas Foods, has more than doubled to €10.7 million.

Accounts filed by the Limerick-based Pallas Foods also show revenue increased by 10 per cent from €319.2 millon to €352.18 million in the 12 months to the end of June last.

Numbers employed by the firm last year increased by 131 to 1,015 as staff costs increased to €44 million.

The accounts give the first insight into the financial performance of the firm in over 10 years as the unlimited entity last filed accounts to the Companies Office in 2008.

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Underlining the growth of the business over the past 11 years, the company’s revenues have increased more than threefold since 2007 when revenues of €116 million were recorded.

Numbers employed have almost tripled since 2007 when 386 were employed at the time.

According to the directors’ report, “the company had another strong performance” in 2018.

The directors state that in achieving the turnover, “the company has focused on increasing sales with existing customers through offering a wider range of products and improving the quality of service and securing new contracts”.

The directors state that the company has been successful in maintaining its gross margin level period on period.

The company achieved a gross margin level of 25.5 per cent for the 12 months to June 30th, 2018.

The directors state: “This measure is a critical factor in the assessment of the company’s performance and a favourable result has been maintained through a rigid cost-management process, strong relationships with company suppliers and changes in product mix.”

Operating profit

The firm’s operating profit increased by 104 per cent from €6.99 million to €14.26 million and a net loss on financial liabilities at fair value of €3.18 million and net interest payments of €287,968 reduced the business’s profits to €10.7 million.

The directors consider the overall trend of rising distribution costs adversely affecting the business as a risk to the business.

Shareholder funds at the business totalled €121.3 million at the end of June last and that included cash of €24.82 million. Shareholder funds in 2007 totalled €8.4 millon.

A breakdown of the business’s 2018 revenues show that €316.4 million revenues were generated in the Republic with €35.7 million generated in Northern Ireland.

The profit last year takes account of foreign exchange losses of €2.6 million and non-cash depreciation costs of €5.3 million. Operating lease charges totalled €2.7 million.

Total pay to directors amounted to €534,045 made up of emoluments, share option gains and pension contributions.

The business received a capital contribution of €22.8 million from its parent in 2017 and no further capital contribution was made last year.

A note states that the cumulative capital payment to the business is €43.65 million.

In 2009, the New York Stock Exchange-listed Sysco Corporation purchased the business in a deal valued at €200 million at the time.

Today, the business currently services more than 9,000 customers from its portfolio of more than 14,500 products.