The Irish arm of doughnut maker Krispy Kreme is eyeing further expansion here after its revenues last year surged by 49% to a record €14.94m.
New accounts show that last year Krispy Kreme Ireland Ltd returned to a pre-tax profit of €112,000 after sustaining a pre-tax loss of €415,000 in the prior year due to continuing expansion costs.
The accounts show that in 2023, the firm’s revenues increased by €4.9m from €10m to €14.49m – or an average weekly revenue of €287,461.
The directors state that during the year, the firm continued to grow its retail estate and on December 31 last operated 12 retail locations – an increase of two during the year.
The directors state that the company also continues to grow access points in its DFD (Delivered Fresh Daily) with several partners.
The doughnut maker’s retail locations here include the Swords Pavilions Shopping Centre in north Dublin, Liffey Valley Shopping Centre, Dundrum Town Centre and One Central Plaza, Dame Street in Dublin along with outlets in Galway, Limerick and Cork.
The directors state that the firm’s premium quality doughnuts are freshly made every day with quality ingredients, utilising a secret recipe.
The business has steadily expanded following the opening of its record breaking doughnut selling store in Blanchardstown in September 2018.
On the performance of the business last year, the directors state that “the company began 2023 with a clear growth agenda and during the year has grown despite a challenging economic market environment with significant cost pressure in all input cost lines”.
The directors add that “the company continues to look forward to a future of continuous investment and growth as it further establishes its footprint in the market by adding new retail shops and growing in its DFD business by adding new partners”.
They state that last year, the Irish economy was impacted by high inflation impacting consumer disposable income, input cost and lack of labour and goods in the marketplace impacting operations.
In response, the directors state that they have taken several actions during the year including locking in contracts for input price stability, improving employee pay, working to reduce costs in overheads and taking price increases.
The directors state that they “are satisfied that the company has continued to strengthen its position during 2023 with a portfolio of strong retail locations, successful partners and diversified routes to market that demonstrate its resilience and its ability to be both profitable and cash generative”.
“In 2024, the company will continue to expand its presence with plans to expand with its DFD partners, invest further in digitally enhanced channels and further expand reach and sales via digital channels,” they add.
The firm recorded Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) of €2.06m compared to €819,000 in 2022.
The pre-tax profit takes into account non-cash depreciation costs increasing from €1.14m to €1.74m.
During the year, the company revised its treatment of recognition of revenue generated through third party online orders where previously the revenue was recognised net of the delivery service fee.
The company recorded a post tax loss of €4,000 after taking into account a corporation tax charge of €116,000.
The expansion of the business contributed to the firm’s operating lease costs increasing from €544,000 to €910,000.
The opening of new stores contributed to numbers employed increasing from 154 to 181 that included 174 who were engaged in sales and manufacturing. Staff costs increased from €3.25m to €4.68m.
At the end of December last, the company’s accumulated profits stood at €2.04m while its cash funds totalled €725,000.
Reporting by Gordon Deegan