Odlum’s owner sees €3.3m loss amid ‘challenge’ to recoup costs

VALEO Foods, the owner of brands including Odlums, Batchelors and Jacobs, said it faces challenges recovering energy and other costs that have skyrocketed due to the Russian invasion of Ukraine.

The Irish group owns a number of other well-known brands such as Shamrock and Rowse and sells its products in more than 100 countries. It is majority-owned by US investment giant Bain Capital.

“The economic impact of the current Russian-Ukrainian conflict, particularly in terms of the significant increase in the cost of energy, utilities and consumables, together with the increased pressure on the supply chain and the availability of certain raw materials, presents a challenging environment for the Group, particularly with a view to recovering such increases,” Valeo’s directors noted in the newly filed accounts for the deal, signed in October.

The company, which employs approximately 4,500 people, is led by Chief Executive Seamus Kearney.

The latest balance sheets show that sales excluding acquisitions in the 12 months to the end of March 2022 increased by only 3 percent to 1.25 billion euros.

It posted an operating profit of 90.6 million euros but recorded a loss of 3.3 million euros after 17.6 million euros in special items together with 57.7 million euros in financial expenses put it in the red.

The loss came a year after a nearly €100 million non-cash impairment on one of its assets in the previous financial year resulted in a loss of €98.4 million in the period.

Valeo was sold to Bain Capital by majority owner CapVest in 2021, and the food giant subsequently restructured its debt.

CapVest, controlled by Seamus Fitzpatrick of Cavan, acquired Batchelors and Origin Foods in 2010 to form Valeo Foods.

Despite last year’s loss, Valeo insists it is well positioned for growth.

“The Group’s strategy remains largely unchanged despite the pandemic,” the directors note in their financial statements.

They add: “Valeo will continue to grow by focusing on organic sales growth and maintaining its existing distribution base, maximizing sales margin performance through effective pricing and promotional strategies, leveraging the group’s purchasing power and maintaining an efficient cost base.”

Directors noted that acquisition activity has been a “key growth driver” in recent years.

During the past fiscal year, Valeo completed the acquisition of New World Foods and Freshers Foods.