Rise in contracts helps boost Sutcliffe results

Sutcliffe Catering has reported buoyant financial results, citing its success at winning new contracts and sharp improvements in its margins as the cause.

According to preliminary results for the year to 1 October, operating margins are up by 64% and now stand at 7.7% on average.

And since the takeover by Granada in March 1993, Sutcliffe has significantly increased the number of contracts it holds to 2,233 - up from 1,940 at the end of 1993. It now holds contracts with 83 of the stock market's top 100 companies.

Turnover in the financial year was up 11.1% to £405m and pre-tax profits increased to £31m.

Sutcliffe reports that there was strong growth in Ministry of Defence, marine and NHS hospital contracts, and that, overall, the last year was a record for sales, with £55m in new contracts alone.

In addition, a further £50m of contracts are in the pipeline, said Sutcliffe, which will feed through into results in the next financial year.

The acquisition of civil service caterer Forward in February this year accounted for 256 contracts with a total turnover of £27m.

The improvements in margin are said to have been due to "the streamlining of administration and accounts and the creation of new synergies with Granada", such as with purchasing and car policy.

Sutcliffe accounts for just over 40% of the turnover of Granada's leisure and services division, the single biggest part of the parent group.

Within the division is Granada Hospitality's road services business, which improved operating profit by 33% thanks to a strong contribution from the new Cherwell Valley site on the M40.

Motorway lodges had a good year, with room rates up by 5% for the second year running and bedroom occupancy steady at 77%. Of Granada's two hotels, the Victoria and Albert in Manchester was reported to have bedroom occupancy "running well over 80%".