Zolfo Cooper, the leading independent advisory and restructuring firm, has announced the results of its second annual survey of the best performing foodservice companies in the UK. Harbour & Jones topped the list with compound annual profit growth of 46.5% over the past three years.
Harbour & Jones moved up from third place last year, and provides services to business and industry (B&I) clients as well as concessions. Recently the company also launched a front-of-house service, expanding an already impressive offering.
In second position was The Crown Group, which grew profits by 43.3%. It is a family of 12 separate trading companies which delivers a multi-service offering.
Third place was taken by Dine Contract Catering at 42.7%, a family run business which competes successfully in the B&I, education and welfare sectors and continues to add to its portfolio.
Use the link below to access the full Top 20 list which includes both high profile and less well known companies.
Dynamic nature of the independent sector
The report highlights the dynamic nature of the independent sector of the foodservice industry. This is one of the most competitive business sectors in the UK, with a constant supply of new entrants and a large number of market stalwarts. The successful companies in the index show their commitment to growth by investing in people, constant innovation, quality services and products, and an absolute focus on the needs of their clients.
Graeme Smith, a corporate finance partner and head of the hospitality sector at Zolfo Cooper, commented “The foodservice sector is showing greater confidence, particularly among the independent companies. The trend towards outsourcing continues, companies are spending more on discretionary events, and also food is being used more and more as a point of differentiation by venue owners and companies. Independent operators have been quick to take advantage of these trends and major on their ability to be very responsive to their clients’ needs”.
Characteristics of the top 20 foodservice companies
The constituents of the index can be analysed by a number of factors, including location, turnover, movement within the index and service proposition among others.
Location
Almost three quarters (14) of the top 20 companies are based in London (8) and the South (6), two (Dine Contract Catering and Waterfall Services) are based in Warrington, while the remaining businesses (4) are based in the Midlands.
Turnover
The majority of the top 20 fastest growing foodservice companies have turnover of between £10 million and £50 million, with 14 companies (70%) in this bracket. Four companies have turnover in excess of £50 million with Westbury Street Holdings standing out with turnover in excess of £500 million recorded in its latest accounts.
Index movement
This year’s report list includes 11 companies which also featured in last year’s index as well as nine new entries. Of the 11 which qualified for a second time, six have moved up while the other five have moved down.
Service proposition
The vast majority (75%) of index constituents serve B&I clients as part of their client mix. But the range of clients and services is expanding. Schools are the next most commonly serviced client base (45%), followed by events and venue catering, with 30% of companies mentioning these as part of their portfolio.
Among the constituents, there would seem to be a trend to add complementary services alongside their catering offering, particularly front-of-house services, facilities management, venue finding or provision (including marquees), and cleaning and security. Some are also expanding even further afield, into vending, pest control and waste management.
Methodology
To be included in the report, businesses had to be registered in the UK and be independent and unquoted. Companies that grew through acquisition also qualified for inclusion.
Profit growth was measured by compound growth rate over three years, based on statutory accounts. Qualifying companies had to have a turnover of at least £8.0 million in their latest accounts and profit of £250,000. They had also to have been profitable in all three years and have achieved profit growth in their latest financial year.
Click here to read a copy of the report, which reviews sector trends and success factors and profiles the Top 20
For more information about Zolfo Cooper click here