Valeo Foods revenues top €1bn but impairment charges put it into the red

Dublin-headquartered Valeo Foods, which was acquired by private equity firm Bain Capital in a €1.7 billion deal in May, recorded a €102.7 million pretax loss in the year prior to its sale due to impairments.

The move came as turnover at the group topped €1 billion for the first time, rising from €942.7 million in the 12 months to the end of March 2020, to €1.02 billion a year later.

The company, whose brands include Jacob’s biscuits and Batchelors baked beans, was created in 2010 by Cavan financier Séamus Fitzpatrick’s London-based investment company CapVest Partners. Other brands it owns include Kettle Crisps, Odlums, Kelkin and Fox’s Glacier Mints.

The pretax loss reversed a €53.3 million profit in the prior year. It included exceptional net costs of €113.1 million, the largest component of which related to the impairment of goodwill in respect to one of its businesses.

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On a like-for-like basis, excluding exceptional items, the group made a €10.4 million pretax profit, down 60 per cent from €25.2 million in 2020.

The company said Covid had little impact on the business, with ambient grocery product sales remaining solid and growth apparent in categories such as honey, flour, pasta and canned goods.

Valeo was originally used as a vehicle to acquire two separate Irish businesses, Batchelors and Origin Foods. It has since expanded from an exclusively Irish food business into a global one with multiple brands and lines.

Acquisitions

In recent years it has been on the acquisition trail with more than 15 deals concluded since it was founded.

The company employs more than 4,000 people across Ireland, Britain, Italy, the Czech Republic, the Netherlands and Germany.

A breakdown of revenues shows close to half its turnover comes from the British market, with a further €310 million coming from the Republic of Ireland. The group’s top three customers comprise almost a quarter of turnover.

At the end of March 2021 Valeo Foods had €35.4 million available in undrawn committed borrowing facilities.

“The directors believe that Valeo is still well placed to grow in the current and future years,” the company said. “Valeo will also continue its disciplined approach to value accretive M&A activity which has been a significant driver of growth in recent years,” it added.