The Broderick family say they have transformed the fortunes of Ina’s Kitchen Desserts after buying back control of the business following a failed attempt to force it into examinership.
Sales of the predominantly chocolate-based snacks bounced back by 12 per cent to €13.3 million according to accounts for 2022 – company’s first full year back in the family’s hands.
The documents were filed in recent days, with directors Barry and Bernard Broderick saying that earnings had continued to grow since.
However, the company, which is named after the Brodericks’ mother, Ina, who founded it at her kitchen table back in 1984, still reported a loss of €593,828 after tax.
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“Following the return of the Broderick family to the helm of the company in October 2021, significant efforts were undertaken to revitalise the business,” the brothers said. “Overheads were streamlined, relationships with key customers were rebuilt, and focus was directed towards core strengths – innovation and quality products.”
They added that some of the people “who contributed to the company’s initial success” had been “welcomed back”.
That would have included Barry Broderick, who had been sacked from the company in a dispute with the BDO fund that had taken a 75 per cent share in the business in 2019 after converting loan notes into equity. The relationship between the two sides had soured quickly.
After a failed attempt by the family to put the company into examinership, the Brodericks secured around €3 million in funding from corporate financier Kevin Warren, Declan Ryan’s Irelandia Investments and accountant Pat Burke to buy it back from BDO Development Capital in a deal that crystallised a loss of almost 50 per cent for the BDO investors.
The recent cocoa crisis will provide further challenges in 2024 and 2025 but we believe we can overcome these challenges with the assistance of our suppliers and customers
The Brodericks said a comprehensive review of the product range had been conducted once they took over the business again, “resulting in the discontinuation of loss-making products worth €1.8 million”.
“Pricing adjustments were made to ensure the viability of remaining lines. These measures have enabled the company to transform from a negative Ebitda [earnings before interest, tax, depreciation and amortisation] of €438,000 in 2021 to a positive €600,000 in 2022,” the Brodericks said, adding that Ebitda had continued to improve in 2023 and into the first quarter of this year.
The business recorded an operating profit of €361,685 compared to a loss of €1.5 million the previous year. That converted to a pretax loss of just over €300,000 – down from just under €2 million – after interest payments of €611,000.
The company, which employs just over 100 people at its plant in Tallaght, said its sales pipeline remained “robust, with significant opportunities in both the British and United States markets”. Ireland accounted for roughly a third of sales in 2022, with the rest of the world – a group understood to include the UK – accounting for just under half. Continental Europe accounts for the balance.
It said “unprecedented increases” in energy and raw material costs had seen it trigger two price increases in late 2021 and 2022.
“The recent cocoa crisis will provide further challenges in 2024 and 2025 but we believe we can overcome these challenges with the assistance of our suppliers and customers,” the Brodericks said.
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