Activities

Elior UK (known as Avenance UK until 2005) is the UK’s fourth largest contract caterer. Its main activities are in business and industry and concession catering (in motorways, airports and railways). The company feeds more than 250,000 people a year through more than 600 restaurants, of which 460 are staff restaurants.

It is owned by Groupe Elior of France, which is the world’s fourth biggest player and operates in 12 countries.

The UK company has been built up from a number of acquisitions since 1992. Due to its rapid expansion over the previous three years, it was streamlined in March 2005.

As a result, its key operating companies Avenance and Eliance Restaurants and subsidiaries such as Digby Trout Restaurants and Azure have been integrated into a single operation under the Elior UK name.

The group now operates as two divisions:

• Avenance Business and industry contract catering
• Specialist markets. This brings together Eliance Restaurants, Digby Trout Restaurants, Azure and Elior UK Services. It also includes health, education and Ministry of Defence contracts, vending and facility management and concessions.

Its key brands, including franchised names include Mojo coffee, Flavours, Paul patisserie, Delifrance and Puccino's.

Timeline

• 1991: Francis Markus and Robert Zolade create Bercy Management in France in order to build up contract caterer Groupe Elior.
• 1992: Groupe Elior buys High Table, a London-based catering company with a £14m turnover. Its managing director, Tim West, presides over the group’s subsequent growth in the UK.
• 1995: The group forges a partnership with Catering & Allied.
• 1996: It adds Hallmark Executive Catering and Drummond Thompson to its portfolio.
• 1999: The group buys Brian Smith and forms a joint venture with Catering & Allied called Eurocater, of which Elior holds 80% of the shares
• 2000: The group buys Nelson Hind for £30m, giving it a foothold in Scotland. The companies are brought together under the Avenance UK name. West serves as its managing director until becoming the group’s first chairman between June 2004 and June 2005, when he steps down.
• Autumn 2002: Avenance buys Digby Trout Restaurants.
• April 2004: Avenance becomes the first UK contract caterer to win organic status from the Soil Association. It plans to roll out the Avenance Organics brand from two pilot client sites in Harlow, Essex, and Beckton, East London
• November 2004: The group acquires a 51% stake in Azure Support Services, a £15.2m turnover company specialising in sports and leisure catering. Clients include Glasgow Rangers and the Royal Yacht Britannia. 
• Early 2005: Avenance adds the high-class patisserie brand Paul to some of its airport and historic sites and sets up a central bakery to support its London outlets. It also opens franchised Puccino’s coffee bars at railway stations in Milton Keynes, York and Watford.
• March 2005: Avenance UK is streamlined into two divisions (Avenance Business and Industry and Specialist Markets) under the Elior UK banner.
• March 2006: Chief executive Robert Zolade announces plans to return the company to private ownership because its performance on the Paris stock market has failed to reflect the company’s strength and regular growth.
• May 2006: Elior and Holding Bercy Investissement (HBI) – the investment vehicle controlled by Elior chief executive Robert Zolade – launch a public offer of  €13.40 (£9.25) per share that runs from 10 May to 13 June.
• June 2006: HBI announces that, following the public offer, it has boosted its stake in Elior from 19.34% to 90.54% and increased its voting rights from 20.7% to 90.22%.
• July 2006: Elior extends its public offer for a further 10 days to give shareholders a chance to offload their investments.

Financial snapshot

Full year

Turnover: €2.8b (2004: €2.54b)
Pre-tax profit: €140.4 (2004: €117.7m)

Half year

Turnover: €1.49b (2005: €1.39b)
Pre-tax profit: €59.7m (2005: €54.3m)
 
Full year end: 30 September 2005
Half year end: 31 March 2006

These figures are for Groupe Elior of France

Operating data

Breakdown of interim figures for the six months to 31 March 2006

Contract catering and facility management:
Turnover: €1.03b (2005: €976.3m)
        Business: €532.4m
        Education: €309.6m
        Healthcare-Seniors: €189.7m
Ebit: €69.8m (+13.9%)

Concession catering and travel retail
Turnover: €456.8m (€422.1m)
        Airports: €159.5m
        Motorways: €130.1m
        City centres: €167.2m
Ebit: €15.3m (-13.1%)

UK figures
UK turnover: £177.2m in 2003-2004
UK contracts: about 620
UK staff: more than 6,000

Strategy

"Taking into account the effect of the public protests that took place in France in the education sector and the impact of the rise in fuel prices on motorway traffic, the group expects organic growth in sales of between 5% and 6% on a comparable basis and a stable operating margin for the 2005/2006 fiscal year compared to last year. Elior notes the importance of the contribution of the second half of the year on the Concessions results."

Source: interim results statement, 7 June 2006

Chief executive

Mike Audis

Key directors

Co-chairman of Groupe Elior: Robert Zolade
Marketing director, Elior UK: Ian Styles
Sales director, Elior UK: Andrew Mortimer
Finance director: Tim Doubleday
Human resources director: Henrik Mansson
Mananging director, Avenance Business and Industry: to be announced
Managing director, specialist markets: Mark Nelson

Contact

33 St John’s Lane
London
EC1M 4ND

Tel: 020 7336 7052
Fax: 020 7336 7062

E-mail:
Website: http://www.avenance.co.uk

Commentary

Elior UK, which holds 4% of the UK contract catering market, is looking to expand its presence in sectors which are currently a minor part of its activities.

In 2003, 90% of group turnover came from the business and industry sector. The plan is to increase the contribution made by health, education and defence contracts to 40% of total sales.

In January 2004, the group set up a new sales and marketing office in London and recruited a new sales team for these three sectors. As part of its expansion drive, it also recruited specialists in food innovation, creative design, diet and nutrition, market research and retailing.

The group has dropped its veto on state school contracts (where it felt the food was poor quality and under-funded) but has made it clear it will not chase contracts with an ingredient cost below 55p a meal.

It is also keen to boost the 98-strong concessions business handled by Eliance Restaurants and Digby Trout Restaurants, whose portfolio includes historic sites such as Edinburgh Castle, the British Museum and the Tower of London along with 16 in-store restaurants in 13 House of Fraser shops in London and Scotland.

Although Elior UK has pulled out of Motorway Service Areas (a major part of its parent group’s business) due to the lack of purchasing opportunities in the UK, it is out to challenge Compass’s dominance in airports, railway stations and museums.

The concessions business also received a boost in late 2004 with the acquisition of sports and leisure caterer Azure.

As part of its bid to raise standards, the group has put more than 150 chefs on placements in prestigious and Michelin-star restaurants in recent years.