Tayto swoops to buy vending machine firm as profits fall
The group behind Tayto crisps - one of Northern Ireland's most iconic brand names - has reported a 60% fall in pre-tax profits to £2.9m as a related firm today announces the acquisition of a vending machine company in Leeds.
Manderley Food Group Ltd has reported a fall in pre-tax profits from £7.1m to £2.9m in the year to the end of June 2016, while sales also fell 6% from £174.2m to £163m.
But Montagu Group, described as an "affiliate" of Tayto, today announced it had bought Freedom Refreshments Ltd - the first vending acquisition by the Tayto family.
And it's the empire's third acquisition in two months, after it snapped up Portlebay Popcorn in Cornwall and Tavern Snacks in London in February.
Montagu boss Paul Allen - also the head of Manderley - said the latest purchase was "a key facet of our strategic development programme".
"While we have a strong share of the vending market in Northern Ireland, we only had limited reach into Great Britain and this deal will enable us to increase our presence significantly within this sector.
"The people at Freedom are experts at what they do, continually developing their brand and subsidiaries through both organic growth and acquisitions."
A strategic report filed with Manderley's results highlighted that the group, which originated in Tandragee, Co Armagh but now has most of its operations in England, harbours concerns. It said the group "recognises that Brexit, currency rate exchange movements and raw material price inflation will present competitive challenges for the business in subsequent financial periods".
But Mr Allen said: "Tayto has always invested heavily in its facilities. Over the past three years, we have reported a total operating profit of approximately £17.5m, paid tax of £4.5m and interest charges of £1.5m - leaving £11.5m of cumulative profit after tax.
"However, in this same period we invested more than £23m in capital expenditure projects across the business, in order to assist with our future and strategic growth."
He added: "The prospect of Brexit has had an inflationary impact, as many of our raw materials are linked to global commodity indices or are imported.
"The weaker exchange rates have driven significant costs into the production costs."
According to the financial statements, staff numbers fell slightly from 1,378 to 1,357 over the period. Around 400 people are employed in Tandragee. Last year the company told trade union Unite that it could make up to 80 people redundant in Tandragee, saying the year had been "difficult" in comparison with the previous period. However, it's understood just a small number of voluntary redundancies took place.