Catering equipment servicing companies provided a beacon of how to continue operating during the pandemic, but when it comes to their finances the picture is a lot less clear.
It remains difficult to get an accurate read on their performance, as many well-known names are subsumed into larger entities when it comes to financial reporting, or they are SMEs and so enact the small company abridged accounts clause which means they don’t publish their finances in full.
One big name in the sector though is JLA, which includes a specialist catering equipment supply and servicing arm in its portfolio. There have been some large-scale changes at the business in recent years, with the firm being bought out by private equity firm Cinven in 2018, followed by Stephen Baxter stepping down as CEO in January 2019. His replacement, Helen Ashton, then herself resigned in September last year, at which point the chief financial officer, Ben Gujral, stepped up to the helm.
Its finances are similarly complex, as prior to the Cinven buyout, JLA’s overall revenue was recorded in an umbrella parent company, JLA Equityco. This has now shifted over to an entity called JLA Midco, which was incorporated in May 2018 as the takeover was taking place. This also covers its laundry and heating equipment divisions, so we can’t say with any certainty what proportion of its revenue was generated by catering equipment maintenance.
Nevertheless, the latest financial results for JLA Midco cover the 12 months to 31 October 2020, during which time the overall group generated £137.4m. It’s a little difficult to compare that to the prior accounting period, because that’s recorded as the 17 months between 14 May 2018 and 31 October 2019. That figure was £170.3m, so doing some quick calculations would indicate that the latest available figures show a broadly positive performance.
However, when contrasted with the operating profit figures, the picture is more troubling. During the previous 17-month window JLA Midco recorded a £13.3m loss, and in the latest reported year that loss increased to £17.9m. In the annual report the directors emphasised: “The group took early action to protect the financial health of the business against the impact of Covid-19 while at all times preserving its ability to honour customer commitments. The group has benefitted
from the furlough job retention scheme and has made organisational changes through a redundancy programme. As a result, the group has shown resilience through the national lockdown in 2021.”
Elsewhere, the results of Stevenage-based Serviceline are also streamed within its parent company, the AFE Group, itself owned by the Ali Group.
We do know that the group finances for the 12 months ending 31 August 2020 saw its operating profit slide by 46%, from £12.6m to £8.8m, while revenue was also cut by 18% from £120.2m to £98.6m. These numbers also includes the figures for manufacturers Williams, Falcon, and Mono, plus bakery equipment servicing company Millers Vanguard.
CEO Tim Smith detailed: “Profit levels have fallen dramatically in the face of the continued trading disruption. We have taken mitigating actions in anticipation of the continued tougher trading conditions. This includes a recruitment freeze in all but exceptional circumstances, cost reduction initiatives, and reductions to capital expenditure unless vital for health and safety or continuity of operations.
“We have deployed various cost control, cash flow and operational efficiency initiatives to support our future performance and competitiveness.”
Due to the Covid impact, the group also executed a plan which included extensive operational change and a significant restructuring programme at each of its business units.
Other major names in the UK catering equipment servicing sector, such as MCFT, C&C Catering Engineers, Crystaltech Services and Marren Microwave have all chosen to exempt themselves from publishing their full finances.