Supermac's profits up 18% to €6.2m

PRETAX PROFITS at fast-food group Supermac’s last year increased by 18 per cent to €6.2 million despite a decline in revenues from €63 million to €58.8 million.

Accounts for the year to the end of last December show the Galway-based group’s operating profit fell by 15 per cent from €6.1 million to €5.2 million. Supermac’s opened its 100th outlet on the Tuam Road, Galway, earlier this month.

The firm was founded by former schoolteacher Pat McDonagh who opened the first outlet in Ballinasloe in 1978 at the age of 25 and continues in his post of managing director.

“We’re delighted with last year’s results and we’re delighted with 2010 as well where we’re on target to make the same level of profit as last year,” Mr McDonagh said yesterday.

He added that six new outlets have been opened this year with the group adding 250 full-time and part-time jobs in 2010.

“We’re very happy to be in a position of growth. The market is challenging and looks that it will be even more challenging next year. We kept our business tight during the good times and it is now paying dividends. We have kept costs and overheads tight and are working smarter and harder,” Mr McDonagh said.

The six additional outlets that opened this year involved four group-owned restaurants and two franchise outlets.

Mr McDonagh said Supermac’s is looking for further expansion in 2011 and intends opening a further four to five outlets. He added that rents are down between 25 per cent to 50 per cent on new rental properties.

The company filings reveal that the group added €1 million in investment income to its operating profits, resulting in its pretax profit figure of €6.2 million.

Last year was the first since 2004 that the company’s profits were not adversely affected by writedowns through its investment in the US-based Claddagh Irish Pubs chain.

Between 2005 and 2008, the group wrote down almost €23 million in its investment. This included €1.8 million in 2008.

The directors’ report for 2009 indicates turnover reduced last year “due to the current economic climate”, but they are “satisfied with the performance of the group during the year”.

The accounts also include depreciation and amortisation costs totalling €1.4 million last year. Accumulated profits stood at €26.6 million and the group had €17.6 million in cash at the end of last year.

The figures show that numbers employed by Supermac’s declined from 642 to 617 last year, with staff costs falling by 2.5 per cent from €12.8 million to €12.3 million.

Cost of sales last year fell by 11 per cent from €30.2 million to €28.3 million, while administrative expenses reduced by 4.5 per cent from €26.5 million to €25.3 million.

The company directors are Pat McDonagh and his wife, Úna. Directors’ remuneration last year remained the same at €62,789. The directors recommended no dividend be paid.

The company’s turnover is derived from the operation of fastfood outlets and service stations on the island of Ireland and counts nine subsidiaries engaged in fast food, patent technology, forestry development and franchising technology related to fast foods.

Separate accounts filed for one of the subsidiaries, Supermac’s Ireland Ltd – which is solely engaged in the sale of fast food in the Republic – show that last year it secured a pretax profit of €3 million on a turnover that reduced by 5 per cent from €29.8 million to €28 million.