Revenues at the Dublin headquartered consumer food producer behind well-known brands such as Jacob's, Batchelor’s, Kelkin and Odlums this year increased by €142.6m or 11% to €1.39bn.
However, new accounts for Valeo Foods UC show that higher costs along with an exceptional cost of €21.86m resulted in operating profits reducing by 57% to €31.13m in the 12 months to the end of March this year.
Net finance expenses of €72.4m resulted in a pre-tax loss of €41.28m which followed a pre-tax loss of €2.07m in the prior year.
Valeo Foods operates 85 consumer food brands and is market leaders in 13 categories including snacking & sweet treats, health & wellness, baking & meal ingredients, beverages and food service.
Since the group was established in 2010, it has gone to acquire 18 leading food businesses.
The group’s Ireland revenues increased by 4% to €321.4m while the UK remained the group’s largest market despite revenues declining marginally to €578.6m
The year under review was a breakthrough year for the group’s North America expansion plans where revenues increased from zero to €102.5m while Europe revenues rose from €315.05m to €356.6m. Global export revenues totalled €32.8m.
Numbers employed at the expanding Valeo Foods this year reduced from 4,489 to 4,253 and staff costs declined by €14.7m from €192.73m to €178m. Directors’ pay reduced sharply from €4.05m to €1.37m.
The accounts disclose that Valeo paid out €62.06m in cash - net of cash acquired - for maple syrup producer, Les Industries Bernard et Fils Ltée and a subsidiary in May 2022.
The new business contributed €95.2m in revenues and a post tax loss of €7.3m to the group’s results during the year.
In their report, the directors state that "excluding acquisitions and on a constant currency basis, revenue increased by 3% and operating profit before exceptional items decreased by 41% year-on-year".
They state that ongoing challenges in the retail sector and the broader economic environment including the economic impact of the Russian/Ukrainian conflict, particularly the significant increase in the cost of energy, utilities and consumables, along with increased pressure on the supply chain and availability of certain raw material inputs present a challenging environment for the group, particularly in respect of recovering such increases.
The directors state that additionally, the Group has been continuing to deal with the impact of the Covid-19 pandemic on economic activity and consumer confidence.
They state that Valeo’s "ambient grocery business performed reasonably well due to household consumption and in-home dining, which have remained at relatively high levels since the earlier stages of the pandemic, in the Group’s key markets".
They state that Valeo’s "foodservice and impulse categories remain challenging".
The main components of the exceptional cost of €21.86m were €13.14m in non-recurring business costs, 'other project costs’ of €4.89m and restructuring costs of €3.93m.
Shareholder funds totalled €90.3m while the group’s cash funds reduced from €94.2m to €72.23m.
Reporting by Gordon Deegan
