EXCLUSIVE: Top 10 UK kitchen houses by turnover revealed

Whose revenue is on the up?

I often get asked about who the biggest catering equipment distributors are in the UK, and it’s a notoriously slippery term to define. What kinds of companies could be described as distributors and how they could be ranked has been, up until now, more than opaque.

So we at Catering Insight have taken the issue by the scruff of its neck and delved into a hopefully definitive top 10 ranking. This is made possible due to the transparency of British business practices, namely publicly-available Companies House financial reports.

This information has allowed us to detail the current performance of the biggest catering equipment distributors in the UK and compare that over the past few years too.

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Scope of analysis

In putting together a report such as this we have to lay down some ground rules so that like-for-like is compared. Therefore, we have concentrated on kitchen houses only, namely those companies which supply, maintain or outfit catering equipment and which usually have a commercial kitchen design capability too. These companies only deal with end users, so equipment wholesalers etc are not included, as they would usually be supplying the kitchen houses themselves.

Furthermore, we have eschewed any mainly online dealers – there has to be some kind of full service design or maintenance capability for us to feature them. We have included a brief analysis of some of the leading online firms, including the giant Nisbets, later in the report just for comparison, but they are not in the main list.

We can only include those companies where financial information is available through Companies House too. So for those dealers within large multi-national groups, often the individual division results are not recorded. For example, the Bunzl Group doesn’t release financial results for Lockhart Catering Equipment, but we can see that the global group posted a £7.4bn turnover for 2016, with an operating profit of £409.7m.

Looking in detail, the group reported its UK revenue was £1.1bn, 15% of overall sales. As Bunzl reports that the foodservice sector is worth around 30% of its overall revenue, we can perhaps discern that its UK foodservice earnings for 2016 were around £330m. But this includes other non-food consumables, including food packaging, disposable tableware, guest amenities, cleaning products and safety items. So the actual catering equipment sales total is likely to be quite a bit less than that. And as Lockhart has just purchased the Aggora Group, overall catering equipment sector group earnings will likely further increase going forward.

One firm crossing the food/non-food supply divide is Bidfood, which is a trading division of BFS Group, a subsidiary of the Bidcorp Group – an international foodservice group. The Bidfood Catering Supplies and Hospitality Design divisions’ results are also not recorded individually, but we do know that the overall group’s revenue for 2016 was £2.5bn, up by 4.2% on 2016’s £2.4bn. 2016’s operating profit numbered £45.9m.

Another similar outfit is the Brakes Group. Brakes Catering Equipment is just one of several foodservice industry divisions, including Brake France, Country Choice, Davigel, Fresh Direct, Freshfayre, M&J Seafood, Menigo Foodservice, Pauley’s, Wild Harvest and Woodward Foodservice.

The group’s latest accounts are not available yet either, as its accounting period was extended from 31 December 2016 to 30 June 2017, likely due to its £2.3bn acquisition by the Sysco Group in July 2016. But in 2015, Brakes Group’s annual revenue was nearly £3.3bn, a 6.5% increase from the previous fiscal year (£3bn). How much of that is from Brakes Catering Equipment is pure guesswork though.

And speaking of latest accounts not being available, our top 10 list would have featured Gloucester-based Space Catering Equipment, had the up-to-date totals been published. However, to align itself with its relatively new owner, the Nisbets group, the end of its latest accounting period has been extended from 31 March 2017 to 30 September 2017. But if the 2015-2016 financial year turnover is anything to go by, at £18.8m, a similar total would have placed it at number four on our list.

Rankings

To rank each kitchen house, we have tracked and compared the performance of the largest 10 players by current turnover (that we are aware of). We have also compared operating profit (or loss) totals, as we feel that both these figures provide the most fair and accurate picture of the businesses’ health because there is very little creative accountancy that can affect them.

We have gone back to the 2010 results as and where we can, so that any anomalous years can be seen within the context of overall trends too. Each entry is ascribed with the percentage increase/decrease of current turnover and operating profit compared to the previous year’s amount, as well as stating its financial year end date. While some financial years end in March or April, and other companies go by the calendar year, it was not possible to match up the precise same periods of each kitchen house, but with only a few months’ difference between the results, hopefully they should be as near a representative comparison as possible.

The turnover is recorded in millions, while operating profit is displayed to the nearest thousand. And we have listed them in reverse order to make you wait with bated breath to see who occupies the top spot.

There were a string of kitchen houses who were just outside the top 10, at or approaching around £10m turnover. The likes of Court Catering Equipment, Shine Catering Systems, Vision Commercial Kitchens, IFSE and Hallmark Kitchens were knocking on the door, but none quite had the headline figures this year to make it in there.

Aggregated growth

Pulling together the top 10’s revenue and turnover gives us a stark demonstration of how quickly the top kitchen houses have grown over the last 7 years. For one reason or another, some entrants on the list do not have recorded totals before 2012, so the most accurate picture from the last 4 years shows that aggregated turnover has increased by nearly 38%, from £144.9m in 2013 to £199.3m in 2016.

The top 10 UK kitchen houses’ aggregated turnover has seen a mostly upward trend.

The operating profits totals provide a rather different story, however. Again, if we take the fullest picture of the last 4 years, the aggregate figures start to soar but then plummet for 2016, thanks to a couple of companies’ significant losses. From 2015’s high of £8.1m, in contrast, 2016’s total of £3.8m represents a 53% reduction.

Collectively the top 10 UK kitchen houses’ profit took a massive hit in 2016.

Looking at the overall market, these profit erosions could be attributed to both the Brexit vote impact and competition from online dealers. But there are exceptions to the rule, and of course each company’s results reflects its own story.

So, we hope you will enjoy this window into the kitchen house market – I’m sure it will provoke a good deal of debate!

Clare Nicholls
Editor
Catering Insight

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