Butlers plans more overseas expansion as profits rise 17%

Butlers Irish Chocolates is eyeing further international expansion of its cafe format as it wrapped up a sweet year in 2006, with profits at the firm rising almost 17 per cent to more than €2.1 million.

Sales at the business climbed 18 per cent to €23.2 million from €19.7 million in 2005.

Butlers Chocolates is owned by the Sorensen family, who acquired the business in 1959.

Gross profit at the company increased more than 20 per cent in 2006 to €14 million, as revenue from its chain of 10 cafe shops improved. It also sells chocolates online and they are stocked by a number of airport duty-free outlets.

The company's managing director, Colm Sorensen, said an outlet was due to open soon at the extended Pavilions shopping outlet in Swords. It is also due to open an outlet at Liffey Valley shopping centre.

Mr Sorensen said future Irish growth was more likely to be based on an expanded product range rather than additional cafes.

Butlers Chocolates launched its cafe chain in 1998 and last year opened stores at Dublin's Heuston station and in Galway.

In 2006, it also agreed a franchise deal to open its first outlet outside Ireland. That cafe is operated in New Zealand by Irish expatriate Peter Kelly. He is opening a second Butlers Chocolate Cafe in Wellington next month.

Mr Sorensen revealed that Butlers is in advanced negotiations that should see franchise agreements soon signed in the US and in some continental European territories. "We're being very careful with the brand, and interest has come largely from Irish expats," he said.

"We're still looking at the UK, but would establish company-owned cafes there."

He said Butlers had not yet signed up for any sites in the UK.

The three sibling directors of the firm - Colm, Mairéad and Owen Sorensen - shared salaries totalling almost €1.7 million last year, a substantial increase on the €614,000 they paid themselves in 2005.

They also own one of the company's operational sites in Clonshaugh, Dublin, which they rent to Butlers for €520,000 per annum. Butlers leases all its cafe locations, at a combined annual cost of almost €1 million.

Accounts just filed for the company, which employs more than 250 people, reveal that it also had shareholder funds of more than €12.1 million at the end of 2006. The company incurred capital expenditure costs of €1.27 million during the period.

Butlers Chocolates is wholly owned by Chez Nous. Colm and Mairéad Sorensen own a combined 80 per cent share of that entity, while their mother, Catherine, owns 13 per cent and Owen Sorensen owns the remaining share.