Acquisition costs eat into Valeo Foods profits

Exceptional costs of €12.24m ate into profits at consumer foods group Valeo Foods last year.

Newly-filed accounts for the group - which owns popular brands such as Odlums, Batchelors, Jacob's, Kelkin and Erin - show pre-tax profits fell 16% to €24.2m in the 12 months to the end of last March.

Revenue rose by 8% to €634.4m.

The exceptional costs included €4.49m in severance costs; business acquisition costs of €2.1m; other special consulting costs of €2.1m and other restructuring-related costs of €3.7m.

During the period, Valeo purchased the confectionary division of Finnish business Raisio for €96.2m and Italian biscuit and cake maker, Dolciaria Val d’Enza for €16m and also acquired other confectionary businesses in the UK and the Czech Republic.

The exceptional operating expenses were off-set by the group recording a €15m gain on the sale of property, plant and equipment.

Since Valeo was established in 2010 - through the merger of Batchelors and the consumer foods arm of agribusiness Origin Enterprises - it has acquired 12 businesses and it continued on its acquisition spree last August with the purchase of UK confectioner, Tangerine.

Last year's purchases boosted Valeo's employee numbers to 1,321 and increased staff costs by over €6m to €66.4m. Directors’ pay dipped marginally to €1.37m.

Valeo's pre-tax profits, before exceptional costs, rose from €31.5m to €36.5m.

Ireland accounted for 45% of its revenues, with the UK accounting for 30% of sales.

Operating profits, last year, rose by 9% to €63.69m