Supermac’s upbeat despite 15% fall in profits

THE managing director of fast food chain, Supermac’s said yesterday that he was happy with the group’s performance last year in spite of a 15% drop in pre-tax profits.

Accounts just filed with the Companies Office show that pre-tax profits at Supermac’s (Holdings) Ltd fell from €6.2 million to €5.2m in the 12 months to the end of December last.

The group recorded the drop in profits in spite of the Irish-owned group increasing its revenues by 2.7% from €58.9m to €60.5m.

Supermac’s operates over 106 restaurants in the Republic and the North and employs 2,600 people in directly-owned and franchised restaurants.

The company was founded by Pat McDonagh, who opened the first Supermac’s outlet in Ballinasloe, Co Galway, in 1978 and he said yesterday: “Overall, we’re happy with how the company performed last year. It is a good result in the current climate.”

Mr McDonagh attributed the drop in pre-tax profits to “increased labour and food costs”.

He confirmed that the group is looking at further expansion next year with the opening of “three to four new restaurants”.

Mr McDonagh said that he expected revenues and profits in 2011 to be in line with 2010.

He said: “We’re working very hard to stay standing still.”

Mr McDonagh attributed the increase in revenues last year to the opening of new restaurants. He said: “On a like-for-like basis, revenues were down1%.”

Supermacs directly operates 32 restaurants with franchisees operating 74.

The figures show that the group had accumulated profits of €31m last year and its net assets of €30.7m included cash of €18.4m.

Mr McDonagh said: “We kept our feet on the ground during the Celtic Tiger and didn’t over expand.”

Mr McDonagh said that re-investing in the business is very important. He said: “We have always reinvested profits and last year re-invested €6m upgrading and purchasing properties and this year will re-invest €7m.”

Staff costs last year increased from €12.3m to €13m. The filings alsoshow that the group had a write-down of €282,129 on investment properties.

The figures show that Supermac’s Ireland Ltd purchased a property for €5m from Mr McDonagh and is used for trading purposes. Mr McDonagh said this property is the company’s Mallow outlet.