BOTH PROFITS and turnover at the Co Waterford food business Flahavans increased in the 2011 financial year, according to accounts just filed.

The company intends to invest €1.5 million to €2 million in capital expenditure in the coming year to support the growth of its business.

Turnover in the year to the end of June 2011 was €15.8 million, up from €13.59 million the previous year.

Pre-tax profits for the group were up to €1.63 million, from €1.31 million the previous year.

The cold weather during part of 2011 and the value-for-money aspect of porridge were among the reasons for the increased turnover, according to sales and marketing director John Noonan.

He said between 15 to 20 per cent of sales were to the UK and the US. Flahavans began selling into the UK market in 2003 and early last year began to sell its products in the US.

He said the brand is supported by the view that Ireland is a good source for wholesome foods.

The accounts for Finegrove Holdings Ltd, holding company for the Kilmacthomas, Co Waterford-based Flahavan business, show the group had an average of 51 employees, including executive directors, during the 2011 year, up from 49 the previous year.

Total staff costs were €3.03 million (compared to €2.87 million in 2010). Staff costs included directors’ remuneration and pension contributions of €814,775.

The subsidiary company, Edward Flahavan and Sons Ltd, made royalty payments of €286,393 to a related company, Calusa Ltd. It also bought oats, amounting to €32,463, from Flahavan Farms, a business in which the majority Finegrove shareholder, John Flahavan, has an interest.

The notes to the accounts state that the business has a need for considerable capital investment in the next few years to maintain its production capacity.

“The group is also mindful of the need to build reserves to meet the €2 million BES redemption, of which €1.2 million is repayable in December 2013.”