Reynolds

Foodservice supplier Reynolds is predicting a rosy future of growth despite turnover dropping by over 10 per cent last year.

The Waltham Cross-based business reported turnover of £190.5 million for 2016, down from £213.3m the year before, accounts filed at Companies House show. Pre-tax profits were £507,000, putting the company back into profitability after a £1.7m loss in 2015.

The main reason for the decline was the decision to exit a distribution contract for Pret a Manger, which hit the balance sheet to the tune of £39.8m, according to directors. When taking that out of the equation, sales from continuing operations actually increased by 10 per cent, with EBITDA holding steady at £4.5m.

The Pret decision was taken after a change in strategy to focus on distributing Reynolds’ own products rather than those of third parties. The first three months of the year were also impacted by the restructuring following that change and bedding in new business wins from late 2015.

In 2016 new contract wins also included a major pub chain and a major hotel chain, which the company said diversified its customer base and reduced risk across the business.

“As a result our full year results for 2016 do not fully demonstrate the improved run rate in our profitability that has been seen since this change,” the directors wrote. “However, we believe that the platform that this built (including a reduction in the reliance on agency drivers and improved capacity) has put us in a very strong position for future growth in line with our strategy, something which is supported by the improvement in profitability seen during the rest of 2016 and the first half of 2017.

“Performance in 2017 has been strong and our forecasted end of year position is well in excess of prior year.”

Elsewhere in the business, Reynolds commented that it is coping with the industry-wide challenge of driver recruitment by investing in a Driver Development Scheme, implementing an enhanced warehouse management system and further developing its vehicle routing systems.

Other developments include adding a new fully-owned subsidiary company, Wicker Seafood, and investing in fresh meat business Carnivore FMC.