Last year FEJ published a special report detailing the financial performance of the top 10 largest manufacturers and suppliers of commercial catering in the UK market. It turned out to be one of the most downloaded articles of the year — so we thought we would repeat it again to see how much things have changed in the 12 months since.
There are some industries in which companies are quite literally falling over the data available to them, such is the extent to which their markets are forensically examined.
The British catering equipment sector has never quite had that luxury, but that doesn’t mean it’s not possible to gain an understanding of volume growth, company profitability and industry scale.
Indeed, one way of doing this is by analysing the financial performance of the industry’s largest suppliers by annual turnover. Every major catering equipment manufacturer or brand operating in the UK market has now had its 2017 accounts published by Companies House.
Using the most recent financial reports available, we can dissect the market and build a comprehensive picture of how the market’s largest catering equipment suppliers have performed in their last full financial calendar, and compare that performance to previous years to give it context.
In this report, we have only tracked the 10 largest players (that we are aware of) by turnover, but their size and scale means they collectively account for the lion’s share of business carried out in the market today.
Last year we estimated that the top 10 players were responsible for more than 60% of equipment sales in the UK and there is nothing in the latest set of results to suggest that has changed this time around.
Rules of engagement
In compiling a list of this nature, we have had to set out several ground rules. Firstly, we have only included companies whose core business is to manufacture or supply branded heavy duty catering equipment to operators, primarily through a third party intermediary such as a dealer or distributor.
We have therefore not included tableware and light equipment companies that could stake a claim to reaching the revenue threshold required for this list, such as Neville UK (2017 sales: £19.64m), service and leasing companies such as JLA (£38.19m) or spare parts companies such as First Choice Catering Spares (£41.40m for the 18 months to the end of 2017).
Additionally, companies such as Viessmann (£35.52m) and Brita Water Filter Systems (£62.82m) sell into the commercial catering space but ultimately generate the bulk of their sales and profits from the consumer sector or other markets. There is also the likes of The Alan Nuttall Partnership (£59.46m), which is a significant manufacturer of foodservice display equipment but also derives a large proportion of its turnover from shop-fitting and interior projects.
It is important to note, however, that the structure of company accounts means it is not possible, or practical, to entirely strip out non-equipment figures.
AFE Group, for instance, owns Miller’s Vanguard and Serviceline, which specialise in service and maintenance, and therefore the sales these companies generate contribute to the overall turnover figure given.
It would also be remiss of us not to mention Nisbets. With 2017 sales of £380.32m and an operating profit of £37.7m, the Bristol firm would be the outright number one in this list if it was eligible for inclusion.
While the company does produce its own-label brands and is thought to generate around 20% of its turnover through dealer sales, it is primarily recognised as a direct-selling retailer of catering products.
Headline numbers never explain the entire story behind a company’s position or the many variables that influence overall performance, but they do provide a valuable summary of a market’s size and scale.
The top-line growth of the top 10 catering equipment players — in the face of Brexit-induced adversity — remains impressive. Collectively, they made sales of £620.52m in 2017, an increase of 9.5% versus the previous year.
The growth, however, is slower than the 11% achieved in 2016. Given that the top 10 players posted revenues of £566.83m the year before, 2017 marks the first time the £600m turnover line has been broken.
A central theme of the accounts published by the top 10 players for 2017 is the downward pressure on operating margins, largely due to the devaluation of sterling and unavoidable increases in operating costs.
Despite this, total operating profit actually grew 22% to £49.91m, with only two of the top 10 reporting operating losses. It should be noted that one company contributed 35% of that operating profit figure, whereas its contribution the year before was a more modest 23%.
Additionally, the total does not include any contribution from ITW as it no longer states operating profit on a segmented basis in its accounts.
We hope you enjoy the analysis given over the following pages of this report and, as always, welcome any comments you have on the state of the market and the challenges facing the industry’s largest suppliers of commercial catering equipment.
Without further ado, we present the 10 largest catering equipment manufacturers and suppliers operating in the UK today. Click on each one below for more insight:
1. ITW LIMITED
2. AFE GROUP LIMITED
3. WELBILT UK LIMITED
4. RATIONAL UK LIMITED
5. LINCAT LIMITED
6. WINTERHALTER LTD
7. JESTIC LIMITED
8. ELECTROLUX PROFESSIONAL LIMITED
9. MEIKO UK LIMITED
10. FOODSERVICE EQUIPMENT MARKETING LIMITED
11. THE CHASING PACK…
EDITOR’S NOTE: Accounts published at Companies House do not always tell the whole story of a company’s performance. Businesses legitimately organise their affairs for purposes of tax efficiency, and wholly-owned subsidiaries of global companies can make charges on their UK businesses that depress net profits. In this State of the Nation report, we show only annual turnover and annual operating profit for each company. These are the two most reliable indicators because there is very little creative accountancy that can affect these figures. We also show these figures over a period of seven years so that we get a reasonably accurate picture of improving or declining fortunes over time.