The company that operates the Kentucky Fried Chicken (KFC) franchise across Ireland plunged further into the red during 2010, recording pre-tax losses of €2m.
Documents filed with the Companies Office show Herbel Restaurants (Ireland) Ltd sustained the increased losses after revenues at the firm dropped by 8% — from €23.3m to €21.4m — in the 12 months to the end of Dec 2010.
The company operates 18 KFC outlets in Ireland and according to the directors’ report in the accounts: “Despite the economic conditions, the KFC franchise business continues to trade well.”
The company’s revenues are split between €18.7m from sales at KFC outlets and €2.7m in rent. The company owns a substantial portfolio in Britain and Ireland, with the properties situated in prime locations and predominantly occupied by large retailers.
“The company enjoyed good rental returns during the year,” the report states.
The pre-tax loss of €2m compares to a pre-tax loss of €18,964 in 2009. Pushing the firm further into the red in 2010 was a €1.3m impairment charge, relating to land and buildings, non-cash depreciation costs of €905,733, and amortisation costs of €61,052
This resulted in the firm recording a cash profit in 2010 of just over €260,000.
Herbel Restaurants recorded an operating profit of €1.9m, before exceptional items, with bank interest payments totalling €3.9m contributing to the €2m pre-tax loss. At the end of the year, the firm had bank loans and overdrafts totalling €65m.
The group’s two directors are Belfast businessman Michael Herbert and his wife, Leslie.
The directors state they are in discussions over the renewal of bank facilities and are confident discussions will conclude successfully.
The directors go on to state that they “are satisfied with the company’s results” and that “the company is well-placed to deal with the uncertainties that exist in the current economic downturn and in response, are involved in prudent business planning and work closely with the company’s key stakeholders”.
The loss in 2010 reduced Herbel Restaurants’ accumulated profits to €6.6m, with shareholder funds totalling €37.7m.
The numbers employed by the company in 2010 dropped marginally — from 232 to 228, with staff costs amounting to €5.8m.
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