Nestle Ireland back in profit after restructuring

FOOD group, Nestle Ireland bounced back into the black last year with pre-tax profits of €703,000, following losses of €6.3m in the previous year.

Nestle (Ireland) Limited and subsidiaries, maker of Kit Kat chocolate bars and Nescafe coffee, saw turnover fall from €111.1m to €99.1m in the year to the end of December 2010.

During 2009, there was a decision to restructure the Nestle Ireland business. A specific provision of €5.2m was created to cover redundancy costs and an onerous lease. The accounts said £603,000 of this provision was utilised in 2010.

The principal activities of the group are the importation, sales, marketing and distribution of beverage, confectionery and pet food products.

The accounts read: “The risks and uncertainties faced by the business continue to be those typical of the retail sector and in particular, the fast-moving consumer goods sector and include the level of competitor investment and activity, further customer consolidation, currency fluctuation and commodity price variations.”

The company said turnover continues to be affected by some customers buying from different geographical regions. On the other hand, it said, its “long-standing reputation and tradition within the sector, the strength of its brands and its historical financial security continue to be positive factors”.

The firm’s market share grew last year in the key focus categories. The directors consider the company’s financial risk profile to be low.

Director remuneration in the year was €176,000. This was down from €450,000 in the previous year.

Employee numbers fell from 151 in 2009 to 112 last year, while staff costs fell from €8.2m to €6.4m.

In mid-2002, Nestle Ireland sold its Tallaght manufacturing plant and local brands produced to Premier International Foods.

In 2004, it closed its plant in Mallow with the loss of 57 jobs.

The Nestle Corporation of Switzerland is one of the world’s largest food groups.