Profits at Irish arm of food giant Sysco soar to €16m as pandemic wanes

Limerick-based Sysco Ireland, whose CEO is Mark Lee, bills itself as the largest food group in the country.

Its turnover in the 12 months to July last year soared to €459.3m from €248.4m as restaurants and other food outlets fully reopened.

The latest set of accounts for the business show that it received €14.5m in Covid-related grants from the Government in the last financial year, compared with €16.2m in the previous period.

They also note that the company’s gross margin remained at 23pc in the last financial year, unchanged from previously.

“This measure is a critical factor in the assessment of the company’s performance and the result has been achieved through a rigid cost management process, strong relationships with company suppliers and changes in product mix,” according to the accounts.

At the end of July last year, the company employed almost 1,400 people and paid €39.8m in wages.

Sysco acquired family-owned Pallas Foods in 2009. The Irish business had been founded by the Geary family in the 1980s.

Sysco Corporation, whose CEO is Kevin Hourican, is the largest food distributor in the United States and in Ireland carries a range of more than 10,000 products.

The Houston-based group recently reported record third-quarter income for the current financial year.

Its sales in the period jumped 11.7pc to $18.9bn (€17.6bn), while US food service volumes rose 6.1pc.

Its operating income was 40pc higher at $694.2m for the quarter.

“Our profit leverage improved in the third quarter with gross profit growth outpacing operating expense growth,” Mr Hourican told investors this month. “We expect that performance to continue in the fourth quarter.

“We are also experiencing lower rates of inflation, a trend we expect to continue through Q4,” he added. “These two factors are partially offset by significantly improving supply chain productivity performance.”

This time last year, Sysco said it was experiencing inflation rates of about 15pc, but that it has now come down to low single-digit inflation.

Mr Hourican said that Sysco serves restaurants “up and down the price point spectrum” in the US, and also has a large non-restaurant customer base.

“Many of our sectors are recession-proof, for instance, education and healthcare,” he pointed out. “Other segments are still in recovery: travel hospitality and business and industry.

“Within our restaurant segment, given that we serve all restaurant types, we retain case volume if and when customers trade up or down within restaurant customer segments,” he added.

Earlier this month, Sysco in the US revealed in an internal memo that its systems have been hit with a cyberattack in January.

It has confirmed that the attack compromised the data of as many as 126,000 former and current employees.

It launched a probe onto the breach that involves law enforcement and cybersecurity experts.