Investments lead Avoca owner Aramark to record €14.9m loss

Restructuring costs and strategic investment in new Avoca stores contributed to Avoca owner Aramark Ireland recording a €14.9 million pretax loss last year.

According to new accounts for integrated services group, Aramark Ireland Holdings Ltd, the group recorded the loss as revenue remained flat at €351 million in the 12 months to the end of September last.

The directors state that revenue has remained steady in the year, with increases in food service and retail offset by decreases in non-core facilities business.

The accounts don’t provide a breakdown of the Avoca performance but the chief executive of the Avoca business, Tara O’Neill, said: “I continue to be delighted with Avoca’s performance and direction.”

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The directors for the Aramark group state that earnings before interest, tax, depreciation, amortisation and restructuring costs reduced from €21.4 million in 2017 to €4.9 million last year.

The directors state that “the decrease was largely driven by the non-core element of our facilities business outside Ireland which we have decided to exit and the strategic investment in new stores and footprint within the Avoca group”.

“We will continue to drive strong and profitable growth in our Irish food and facilities business.”

The Aramark group’s redundancy/restructuring costs totalled €3.4 million while combined non-cash depreciation and amortisation costs totalled €15.1 million.

The directors disclose that as part of the increased spend, Avoca Handweavers Ltd acquired 100 per cent of Mill Mount Weavers Ltd and subsidiary Avoca Handweavers Design Ltd for €1.17 million in February 2018.

In 2015, the New York Stock Exchange-listed Aramark purchased the Avoca business for about €60 million from the Pratt family.

A breakdown of revenue at the Irish-based unit of Aramark last year shows that food service revenue increased from €147.6 million to €164.17 million and retail increased from €66.6 million to €73.13 million while facilities management reduced from €128.38 million to €104.98 million.

Property management

The group’s property-management income increased from €8.9 million to €9.3 million.

The group's Irish business increased from €273.9 million to €295.85 million with British and Northern Ireland revenue declining from €39.6 million to €33.2 million. 'Rest of world' revenue declined from €38 million to €22.54 million.

Aramark's Irish revenue include Aramark's Campbell Catering Ltd, which last year received €5.89 million (including VAT) for operating State-owned direct-provision centres at Knockalisheen, Co Clare, Co Cork and Co Meath where more than 825 asylum seekers are accommodated.

Numbers employed by the Aramark group last year increased from 5,242 to 5,417. Salary costs increased from €120.18 million to €132.32 million.

At the end of December last, the Aramark Group had €154 million in shareholder funds. The group’s cash almost doubled from €5.39 million to €10.4 million.