Expansion costs eat into profits at caterer Sodexo
Expansion costs at catering firm Sodexo contributed to pre-tax profits at the business declining last year by 25pc, to €2.76m.
New accounts show that Sodexo Ireland Ltd recorded the drop in pre-tax profits in spite of revenues increasing by 9.5pc, from €94.75m to €103.74m, in the 12 months to the end of August last.
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The firm paid an interim dividend of €2.4m.
Numbers employed by the business last year increased by 110, from 1,866 to 1,976, with staff costs increasing from €48.95m to €53.6m.
Sodexo Ireland's business was last year boosted by payments of €3.54m from the Central Bank, for providing catering services for the bank's 2,000 staff at North Wall Quay, Spencer Dock and Sandyford in Dublin.
Emoluments for Sodexo directors last year increased from €263,000 to €274,000, which includes €44,000 in pension contributions.
Each day, the firm serves more than 90,000 people across 200 client locations in the country.
At the end of August last, the firm had shareholder funds of €7.39m, while its cash pile increased from €11.49m to €17m. The company's accumulated profits totalled €10.9m.
The firm's cost of sales last year increased from €83.9m to €92.97m, while administrative expenses went up from €6.8m to €7.6m.
The company recorded a 21pc decrease in operating profits, from €3.95m to €3.1m.
Interest payable and other finance charges totalling €364,000 reduced the firm's profits to a pre-tax figure of €2.7m. The firm recorded a post-tax profit of €2.27m after corporation tax of €490,000 was paid out.
The profits take account of non-cash depreciation costs of €624,000 and operating lease charges of €528,000.
On the risks and uncertainties facing the company, the directors state that they include the uncertainties in the retention of key customers, and the loss of customers to key competitors.
On the issue of Brexit, the directors state that the business set up a taskforce in 2016 following the referendum result in the UK.
They state that the directors have been engaging extensively with the company's people, clients, suppliers and other stakeholders on the issue of Brexit.
They state that "while the continued uncertainty surrounding the UK's future relationship with the EU presents some challenges for the company's operations, the directors consider that the impact on the business from any exit by the UK will be manageable".