Property revaluation drags KFC franchisee to €45m loss
Company operating fast-food chain in Ireland halves value of investment properties
KFC on Westmoreland Street, Dublin. In addition to owning the KFC franchise for Ireland, Herbel Restaurants (Ireland) Limited operates an extensive property portfolio. Photograph: Brenda Fitzsimons
The company that operates the Kentucky Fried Chicken (KFC) franchise across Ireland has taken an €46.6 million exceptional charge on the value of its investment properties.
The charge means the value of property held by Herbel Restaurants (Ireland) Limited has almost halved from its previous book value.
As a result, Herbel reported a pretax loss of €44.7 million for the eight months to November 29th, 2015, according to accounts just filed with Companies Office.
KFC, one of the world’s largest fast-food chains, operates nearly 40 branches in the Republic and an additional 34 in Northern Ireland.
In addition to owning the KFC franchise for Ireland, Herbel, which is owned by low-profile Belfast-based property developer Michael Herbert and his wife, Lesley, operates an extensive property portfolio.
The company said turnover for the eight months had come to €9.64 million, compared with €18.34 million for the previous 15-month reporting period from January 2014 to the end of March 2015.
Gross margins were stronger at 58 per cent, compared with 54 per cent in the previous reporting period, as the company reported gross profit of €5.6 million compared with €9.9 million previously.
Net liabilities of the group totalled €10.4 million at the period end, with the company reporting net assets of €28.2 million.
Herbel employed 182 staff at the end of November 2015, down from 230 in the prior period, with related costs, including wages and salaries, falling to €2.2 million from €4.7 million.
The company is a wholly-owned subsidiary of Northern Ireland-registered Herbel Restaurants Limited, which in turn is owned by Herbel Limited, also incorporated in Northern Ireland. The ultimate parent is British-registered business Banner Dell, in which Mrs Herbert is the shareholder.