Spares specialist First Choice Group is performing well, according to its latest financial reporting publicly available on Companies House.
Thanks to US group Parts Town Holdings’ purchase of the business on 1 March 2017, First Choice’s year end is now aligned with its parent company. Therefore the current report takes in an 18-month period ending 31 December 2017.
During this time the spares firm generated £41.4m, compared to the £27.6m turnover total in the 12 months to 30 June 2016. This indicates a stable revenue rate overall.
Margins in the latest accounting remained steady too at 27%, as against 2016’s 28%.
Administrative expenses rose to 24% of sales, up 3% from the previous period, as salary and property costs increased relating to the company’s new facility at Kingswood Lakeside.
Operating profit dropped by 44% to £1.2m from £2.1m due to the rise in administrative expenses too.
The report stated: “The First Choice Catering Spares brand is now underpinned by the Parts Town brand, which continues to drive value into the business. The investments in people and infrastructure was necessary to deliver the return expected by the new owners.”
First Choice has also invested heavily in stock during the period, increasing from £2.9m at 30 June 2016 to £5.5m at the end of the latest financial period. “This will improve stock availability to support our one stop shop offering, improve first time pick, so meeting our customers’ requirements, enabling better purchasing terms with suppliers and support the group’s growth and margin targets,” said the directors in the report. “The amount due to creditors has significantly increased in the period due directly to this strategy.”
MD John Whitehouse further detailed to Catering Insight: “The period under review represented momentous changes for the company. In late February 2017 the company was acquired by PT Holdings LLC, the largest catering spares company in the world, and in March of that same year, First Choice moved in to its new purpose-built property at Kingswood Lakeside, Cannock.
“The period ended 31 December 2017 was an 18 month period, with the company aligning its year end to that of Parts Town, making results not entirely comparable. As predicted, operating profit was down compared to 2016 as a result of brief period operating from two facilities, coupled with relocation costs.”
He concluded: “Significant investment in additional stock, infrastructure and new technologies have been undertaken in order to drive continued growth into 2018 and the years to come. More importantly, these investments support the company’s ethos to provide an extraordinary customer experience, develop manufacturer OEM partnerships and deliver innovative technologies which simplify and improve the purchasing experience.”