The Irish arm of doughnut maker Krispy Kreme franchise is eyeing further expansion here after its revenues last year topped €10m for the first time. New accounts show that expansion costs last year contributed to Krispy Kreme Ireland Ltd recording a pre-tax loss of €415,000 after it posted a pre-tax profit of €1.16m in the prior year.
The accounts show that in the 12 months to January 1 this year, the firm’s revenues surged by 43% from €6.98m to €10.01m – or an average weekly revenue of €192,634.
The directors state that during the year, the firm continued to grow its retail estate and on January 1 this year operated 10 retail locations. The doughnut maker’s retail locations here include the Swords Pavilions Shopping Centre in north Dublin, Liffey Valley Shopping Centre, The Square Shopping Centre, Dundrum Town Centre and One Central Plaza, Dame Street in Dublin which opened in August 2022.
The business has steadily expanded despite the impact of Covid-19 following the opening of its record breaking doughnut selling store in Blanchardstown in September 2018. On the performance of the business in the year under review, the directors state that “the company began 2022 with a clear growth agenda and has during the year grown despite a challenging economic market environment with significant cost pressures in all input cost lines”.
“The company continues to look forward to a future of continuous investment and growth as it further establishes its footprint in the market,” they added.
Along with having 10 retail locations on January 1, the company continues to grow access points also in its DFD (Delivered Fresh Daily) with several partners.
The directors 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 continue to strengthen its position during 2022 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 2023, the company will continue to expand its presence with plans to open shops in quality, high profile locations, expand with its DFD partners, invest further in digitally enhanced channels and further expand reach and sales via digital channels,” they added.
The firm recorded Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) of €819,000 compared to €1.77m in the prior year.
The pre-tax profit takes into account non-cash depreciation costs almost doubling to €1.14m. The expansion of the business contributed to the firm’s operating lease costs increasing from €305,000 to €544,000. The opening of new stores contributed to numbers employed more than doubling from 73 to 154 that included 149 were engaged in sales and manufacturing.
The opening of the Blanchardstown store in September 2018 was greeted by a consumer mania not seen in Ireland in recent years.
There was a queue of 300 people when the store opened its doors at 7am on its first day of operation on September 26th when thousands of customers streamed through the doors during the first day to make the opening the biggest store opening for Krispy Kreme across the world at the time.
On January 1 this year, the company said its accumulated profits stood at €2.04m while its cash funds totalled €467,000.