Kentucky Fried Chicken’s Irish operator drops into red

The company that operates the Kentucky Fried Chicken franchise across Ireland plunged into the red last year.

Documents just filed with the Companies Office by Herbel Restaurants Ltd show that the firm recorded the losses after incurring exceptional costs of €4.4 million relating to the write-off of an inter-company loan and incurring a €5.6m loss on the disposal of fixed assets.

The firm — which is owned by Michael Herbert, one of the North’s best known businessmen and who regularly appears on various rich lists — recorded pre-tax losses of €8.76m in the 15 months to the end of March last year. It had profits of €737,426 in 2013.

Over the 15-month period, revenues increased to €18.33m from the €16.16m recorded over the previous 12 months.

The report says that “the directors are pleased with the performance of the company during the year”.

A breakdown of revenues shows that the company generated €15.4m from retail operations and €2.92m from rents.

The report states: “The directors continue to seek opportunities for investment and development that fit with the company’s strategic objectives.”

An operating loss of almost €7.34m over the 15 months compares with the operating profit of €2m generated in the previous 12 months.

Interest payments totalled €1.42m. The loss resulted in accumulated profits falling to €668,337.

The firm’s shareholder funds stood at €30m, including an investment revaluation of €29.56m.

Numbers employed by the firm last year increased from 222 to 230 and staff costs totalled €4.72m.

The firm had bank loans totalling €61.9m. A note attached to the accounts states that “one of the company’s bank loan facilities has expired.

Although the directors expect to be able to renew these facilities on similar terms and the bank has continued to support the company to date, they have no binding agreement with the bank involved”.

The note adds that the directors “are currently in discussions to extend the term of all bank facilities and are confident of signing such terms and hence it is appropriate for the financial statements to be prepared on the ongoing basis”.