Brakes’ parent losses up 37%

By John Harrington, M&C Report

- Last updated on GMT

Impairment charge: in Cucina Lux's M&J Seafood arm
Impairment charge: in Cucina Lux's M&J Seafood arm

Related tags Exceptional items Revenue Generally accepted accounting principles

Cucina Lux, the parent company of foodservice supplier Brakes, saw losses increase 37% in 2010, with UK operating profits before exceptional items down 20.3% as sales growth slowed.

The company also warned of “challenging” trading conditions in the UK, with fears of rising food inflation and the prospect of “extended pressure on disposable income”, in its annual report published at Companies House. Pre-tax losses for Cucina Lux were £93.7m (2009: £68.2m).

Group revenues were up 15.5% to £3.52m following acquisitions made over the period. Group EBITDA fell 6.6% to £141m.
In the UK, operating profit before exceptional items was £58.6m (2009: £73.5m); exceptional items largely related to an impairment charge in its M&J Seafood division and a credit arising from lower retirement benefit obligations.

UK EBITDA fell 11.1% to £119m — the UK acquisition of Freshfayre and Browns increased EBITDA by £100,000. UK revenue growth slowed to 2.8% (2009: 6.9%), with revenues at £1.79bn.

“Of the £48.3m sales growth, £18.5m was achieved organically, and £29.8m was the benefit of the Freshfayre and Browns acquisitions made in the year,” the company said.

“Organic sales growth in a weak market has primarily been achieved through the benefit of cross-sell activity to our corporate accounts, who have seen the consolidation of purchases with one supplier as an opportunity to achieve savings in their supply chain.

“During 2010, we have successfully retained and secured contracts up for renewal, albeit with an impact on margins due to the current competitive market environment.”

Disruption caused by the snow and ice last December cost the company £5m, the accounts reveal.

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