Herbel Restaurants is a family-controlled locally registered company with trading and property interests in Northern Ireland, Scotland, the Republic, the Isle of Man and the Channel Islands.
The range of business interests means that the consolidated trading and profit figures are the outcome of varied influences. The largest part of the turnover figures relates to the large KFC (Kentucky Fried Chicken) franchise outlets. In 2009, KFC trading accounted for nearly £59m out of the total turnover of £66m.
The company reports that the KFC franchise business continued to trade strongly in 2009, despite the changed general economic conditions. During the year, Herbel Restaurants acquired five further KFC outlets at a cost of £4.6m (of which £3.2m was goodwill) and Herbel also opened five further outlets.
While the KFC trading continues to contribute to profitability, the factors causing variations in operating and pre-tax profits stem largely from the large property trading and related development activities. Operating profits in 2008 are shown after a write down in the value of property development sites of £6.1m. In 2009, operating profits were reduced by £3.4m for a similar reason.
Without these one-off allowances, the operating profit figures would be much less volatile.
At the end of 2009, the group held investment properties valued at £160m. As a result of disposals, rental income from property fell from £8.6m in 2008 to £6.6m in 2009.
Against a balance sheet value of tangible assets of £202m in December 2009, the group was facilitated by bank lending of £116m. The value of shareholders’ funds rose steadily early this decade to nearly £80m in 2008. After write downs on property disposals and a negative currency adjustment of nearly £3m, the value of shareholders’ funds fell by £5m in 2009.