Pre-tax profits at Domino's Pizza operator Shorecal last year declined by 14% to €4.8m due to higher operating costs.
New accounts show that Shorecal Ltd recorded the drop in pre-tax profits as revenues decreased marginally from €64.42m to €64.14m in the 52 weeks to December 29 last.
However, the reported revenue decrease is skewed somewhat by the prior year covering a 53 week period.
The company recorded an operating profit of €6.2m and finance expenses of €1.4m reduced profits to a pre-tax profit of €4.8m.
In March of last year, Domino Pizza Group plc acquired the remaining 85% shareholding in Shorecal Limited in a deal worth up to €72m.
The pizza group acquired the shareholding in the business from Shorecal owners, Charles Caldwell, Adrian and Anne Caldwell, and investment vehicle SC Holdings I Ltd.
Shorecal operates 34 of the 99 Domino's stores across the Republic of Ireland and Northern Ireland.
Shorecal last year did not pay out any dividends after paying dividends of €3.8m in 2023 and €20.24m in 2022.
In their business review, the directors state that "both the level of business and the period end financial position were satisfactory".
A breakdown of revenues show that €41.93m was generated in the Republic of Ireland and €22.2m in the UK.
Numbers employed by Shorecal last year increased from 503 to 660 and staff costs increased from €13.8m to €15.57m.
Pay to key management personnel last year increased marginally from €463,700 to €469,939.
The profits for last year take account of combined non-cash depreciation costs of €1.8m.
Shorecal recorded post tax profits of €3.88m after incurring a corporation tax charge of €913,044.
Shareholder funds totalled €21.16m as cash funds declined from €8.19m to €6.45m,
In 2023, a subsidiary of Shorecal Ltd lost, Karshan (Midlands) Limited lost a long running legal battle with the Revenue Commissioners on the job status of Domino's Pizza drivers.
The High Court upheld the finding of the Tax Appeals Commission (TAC) that the delivery drivers should be treated for tax purposes as employees.
Karshan (Midlands) Limited's appeal to the Court of Appeal, heard in July 2021, was successful.
Revenue appealed that decision to the Supreme Court which was heard in February 2023 and a ruling in favour of Revenue was issued on October 23, 2023.
A note attached to the accounts state that in 2014 the Revenue raised estimates amounting to €215,718 in respect of tax years of assessment 2010 and 2011 concerning the issue with Karshan (Midlands) Ltd.
Arising from the Supreme Court ruling, the company engaged KPMG to finalise matters with Revenue in relation to the 2010 and 2011 liabilities and in relation to any liabilities which may have accrued since the decision was issued.
The note states that the KPMG team are in detailed discussions with their counterparts at Revenue.
It also says that the directors, taking into account advice received, have made a provision in the financial statements for what they consider to be a reasonable estimate of the liability as at December 31, 2024.
The directors stated that they are of the opinion that the possibility of a liability beyond this provision is low.
Reporting by Gordon Deegan
