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Harrison Catering blames living wage hike for slight profit drop

24 July 2018 by
Harrison Catering blames living wage hike for slight profit drop

Harrison Catering has blamed the devaluation of sterling, increases in the National Living Wage and central resource investment for a slight drop in its pre-tax profits and gross margins.

The caterer saw pre-tax profits dip from £1.6m in financial year ending 31 March 2017 to £1.4m in 2018, despite a slight increase in turnover from £53.7m to £55.5m.

Gross margins fell from 14.8% to 14.2% across the period for the company, which is the market's largest family-run contract caterer.

In its report, Harrison highlighted April 2017's National Living Wage increase, from £7.20p/h to £7.50p/h, as one cause for the drop.

However a spokesperson said the principal reason for the slight drop was investment in additional resources.

In a statement, they added: "We are delighted to report another year of top line growth as more customers choose Harrison.

"The company's continued invested in market leading central resources resulted in a short-term dip in pre-tax profits, however the directors have chosen to invest for the long-term benefit of the business."

It comes after the company showed a 6% rise in turnover last year following tighter controls over labour costs.

In the strategic report, director Geoffrey Harrison said: "The company continues to gain business in its core markets and remains the largest family run contract caterer in the market.

"The strategy of increasing customer uptake by providing healthy and enticing meals through innovative recipes and concepts continues to appeal to new and existing clients."

Harrison Catering Services sees 6% rise in turnover following tighter control on labour costs>>

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