Snack giant Tayto stays in growth mode as it gobbles up vending firm
THE owner of Co Armagh snack giant Tayto Crisps is continuing its aggressive acquisition policy as parent Manderley Group revealed 2016 sales of more than £163 million.
And yesterday Tayto confirmed that it has taken over the business interests of Leeds-based Freedom Refreshments, which operates 7,000 vending machines across Britain and which has a staff of 160 and sales of £16 million a year.
That follows its recent purchase of London-based Tavern Snacks and a majority acquisition of Devon-based Portlebay Popcorn.
And it it understood that the family-run business - which is now the biggest UK-owned snack maker (Walkers are American-owned and KP are German-owned) - has other acquisitions in its sights.
“This purchase of Freedom Refreshments is a key facet of our strategic development programme," says Paul Allen, chief executive of the Montagu Group, a Tayto/Manderley sister company established to operate and direct the vending arm of the business.
"While we have a strong share of the vending market in Northern Ireland, we only had limited reach into GB and this deal will enable us to increase our presence significantly within this sector.
"The people at Freedom are experts at what they do, continually developing their brand and subsidiaries through both organic growth and acquisitions.”
No details on the price of the deal - which includes Freedom Refreshment's subsidiaries LTT Vending, eXpresso PLUS and NIVO - were confirmed.
Freedom is an established provider of hot and cold drinks and snacks across many sectors, including healthcare, workplace, education and retail.
The vending machines will carry Tayto Group products where appropriate, but their contents will be driven by consumer demand and will also include an extensive range of hot and cold drinks as well as confectionery.
Founded in 1956 by the Hutchinson family, Tayto already has a portfolio of well-known brands including Tayto, Golden Wonder, Mr Porky, REAL Crisps, Jonathan Crisp and Portlebay Popcorn. It produces more than 25 million bags of snacks and crisps each week.
Tayto started its growth spurt in 2006 by acquiring the Corby and Scunthorpe sites of the former Golden Wonder business, and from a turnover then of less than £20 million, its parent Manderley had sales of £163.3m in the 12 months to last June.
Its gross profit came in at £44.2 million, and its operating profit for the year was £3.3m.
In the year under review the company - which operates across six sites in Tandragee, Corby, Scunthorpe, Westhoughton, Wolverhampton and Devon - had a payroll of 1,357 and its staff costs came in at £32.1 million.
Its directors' remuneration was close to £2.2 million, and interestingly its highest-paid director (who isn't named in the report filed at Companies House) saw his salary jump by more than £300,000 over the year - up from £578,406 in 2015 to £897,296.
Mr Allen said: “Tayto has always invested heavily in its facilities. Over the past three years, we have reported a total operating profit of approximately £17.5million, paid tax of £4.5m and interest charges of £1.5m - leaving £11.5m of cumulative profit after tax for the period.
"However, in this same period we invested more than £23 million in capital expenditure projects across the business, in order to assist with our future and strategic growth."
He added: "The prospect of Brexit has had an inflationary impact, as many of our raw materials are linked to global commodity indices or are imported.
The weaker exchange rates have driven significant costs in to the production costs."