How large is the UK catering equipment market? How fast is it growing? And just how profitable is it? These are questions that tend to bring different answers depending on who you speak to, but financial accounts from the 10 largest manufacturers certainly help to shed some light on how the numbers stack up. In our now annual State of the Nation report, we reflect on the performance of the industry’s powerhouse players…
Some industries are blessed with data that portrays an accurate and up-to-date picture of business performance, such is the extent to which their markets are forensically examined.
That can’t necessarily be said of the catering equipment sector, but that doesn’t mean it’s not possible to gain an understanding of volume growth, profitability and strategic trends.
Every major catering equipment manufacturer or brand operating in the UK has now had its 2018 accounts published by Companies House.
Using the most recent financial reports available, we can therefore dissect the market and build a comprehensive picture of how the market’s largest catering equipment suppliers by revenue have performed in the most recent financial period for which accounts are available.
In this report, we analyse the 10 largest players in the market (that we are aware of), assessing their operating performance and highlighting any pertinent commentary provided by company directors.
Last year we estimated that the top 10 players were responsible for more than 60% of equipment sales in the UK today and, once again, there is little 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 restaurant operators, primarily through a third party intermediary such as a dealer.
We have therefore not included tableware and light equipment companies that could stake a claim to achieving the revenue threshold needed to feature on this list, such as Neville UK Plc (2018 sales: £21.06m) or spare parts companies such as First Choice Catering Spares Limited (£31.31m).
Additionally, companies such as Viessmann Limited (£41.61m) and Brita Water Filter Systems Limited (£62.31m) sell into the commercial catering market but ultimately generate the bulk of their sales and profits from the consumer sector or other markets.
Similarly, The Alan Nuttall Partnership Limited (£51.60m) is heavily involved in the manufacture of foodservice merchandising cabinets, but it is also understood that a significant portion of its revenue comes from interior store-fitting and retail projects.
Elsewhere, refrigeration supplier Interlevin Refrigeration Limited would appear to meet the revenue threshold if its figures were annualised, however its latest accounts only provide an 18-month figure (£33.25m) as the decision was taken to align its accounting period with its ultimate parent company last year.
It is important to note 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.
Additionally, the figures published represent the total amount of revenue booked by the UK-registered entity of the company in question, irrespective of the final destination of products sold. Welbilt UK, for instance, makes 40% of its turnover from sales to UK customers. The remaining 60% is generated from sales into other regions of the world.
It would also be remiss of us not to mention Nisbets. With 2018 sales of £398.13m and an operating profit of £28.09m, it would be the outright number one on this list if it was eligible for inclusion. However, it is primarily recognised as a direct-selling retailer of third party catering products. The company does produce its own equipment under several different brands and sources estimate these generate 20% of its turnover (which at £79.62m would put it fourth on this list. It does not formally break out its sales in its accounts, however.
Headline numbers never explain the stories behind the companies 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 experienced by the top 10 catering equipment players comes during a year in which all encountered the uncertainty of Brexit and witnessed the overall foodservice market soften.
Collectively the 10 companies included in this year’s list made sales of £636.82m in 2018, which equates to 2.2% more than the same businesses achieved the previous year. Given that the top 10 achieved 9.5% growth in 2017, and 11% in 2016, it is not unreasonable to conclude that the spectre of Brexit has weighed heavily on the market’s shoulders.
Once again, a theme of the accounts published by the top 10 players for 2018 was the downward pressure on operating margins, largely due to the devaluation of sterling, unavoidable increases in operating costs and the additional investment in stockholding that many manufacturers made in connection with Brexit.
Despite this, total operating profits of the top 10 (not including ITW, which no longer states these on a segmented basis in its latest account) amounted to £57.63m, a 20% improvement on the previous figure of £47.87m amassed by the same firms.
We hope you enjoy the analysis provided in this report and, as always, we welcome any observations or comments you have on the state of the market and the challenges facing the industry’s largest suppliers of commercial catering equipment in the UK.
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:
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.