CAMPBELL BEWLEY, the Irish tea and coffee group, made a pretax profit of €1.74 million last year, as revenues recovered 8 per cent.

The company has also announced the acquisition of British coffee distributor Darlington’s in a bid to expand its business there and reduce its dependence on a “tough” Irish market.

After a 13 per cent fall in 2009 – a year spent in “survival mode” – turnover at Bewley’s rose 8 per cent in 2010 to €77.7 million, while pretax profits climbed 4 per cent.

The group’s Irish operation achieved “low single-digit” growth as its grocery market share grew and it won new food-service contracts, said Bewley’s chief executive John Cahill.

Much of the group upturn was the result of a 10 per cent turnover growth at its US interests – the Boston-based Rebecca’s cafe chain and catering business, and the Sacramento-headquartered Java City operation. The company was also helped by favourable currency exchange movements between the euro and the dollar.

Bewley’s operations in the US now account for 51 per cent of its turnover, having overtaken the Irish business for the first time.

The purchase of Darlington’s, for an undisclosed sum, gives Bewley’s a third platform in addition to Ireland and the US.

“Importantly, it gets us into the London market, which is a unique market as it grows when other markets decline,” said Mr Cahill.

The 2012 Olympics are also expected to result in a lift in food-service trading across southern England, he added.

Darlington’s, which has annual sales of £4.5 million (€5.2 million) and employs 25 people, supplies coffee, equipment and barista training to customers in the hotel, restaurant, cafe and catering sectors. The acquisition was completed on Monday.

Half of the volumes of tea and coffee produced at Bewley’s roasting plant at Northern Cross in Dublin are already exported to the UK market, Mr Cahill said.

“We’ve already been doing business in the UK, but what we haven’t had is a full infrastructure, including training and service, and a delivery platform with depots and vehicles. Darlington’s now gives us that foothold.”

Bewley’s, which is the number one brand in the Irish coffee grocery market and the number three player in tea, is eyeing expansion into the British grocery sector, which is 20 times the size of the Irish market.

Bewley’s has also recently opened a cafe in Dublin department store Arnotts, where chief executive Nigel Blow is introducing a new line-up of brands.

“What’s interesting about it, I suppose, is they say fashion fades but style stays,” Mr Cahill said.

“There was a point at the peak of the boom where a brand like Bewley’s – a traditional brand, you could say a safe brand – wasn’t fashionable for a while and there were new brands coming through. I think there’s been a complete reverse turn on all of that.”

However, the opening of the cafe was part of a wider deal to supply coffee to Arnotts’ restaurants rather than the beginning of a new retail strategy for the group, Mr Cahill said.

“It wouldn’t be something that’s symptomatic; we wouldn’t be saying we’re going to have 30 of these.”

Accounts for Campbell Bewley Group Ltd show that the number of people employed by the group held steady at 796, which includes 73 administration staff and 79 staff in production.

The group had net funds of €6.4 million at the end of 2010, up €3 million.

The directors of the group are the sculptor and artist Paddy Campbell, Síofra Campbell, Cól Campbell, Patrick Lyons and Mr Cahill, who is the only executive director. The bulk of the shares are owned by Paddy Campbell.

ON THE MENU: RENT LEGISLATION MAY BRING BURGERS TO BEWLEY'S

THE ABOLITION of "deeply invidious" upward-only rent review clauses in retail leases will allow the Campbell Bewley group to make a €250,000 investment in the kitchen of its iconic Grafton Street cafe, broadening the range of its menu, according to chief executive John Cahill.

The group, which currently pays €1.5 million in rent to landlord Treasury Holdings, will seek at least a 50 per cent reduction, in line with the fall in the market, once Minister for Justice Alan Shatter publishes the promised rent legislation.

The Bill, which is expected in November, will permit tenants to seek reviews of what Cahill calls "legacy leases", under which rents spiralled during the property bubble amid a lack of transparency in the market.

If its negotiations are successful, it will free up €750,000 with which to make investments.

"We have a number of projects that we have been holding back on, keeping in the pipeline. We want to do work within the kitchens to enable a broader range of food to be offered," said Cahill.

This will include putting in a grill that will allow the serving of steaks and burgers and expand the pizza-and-pasta menu that Bewley's has inherited from the Cafe Bar Deli franchise.

"Obviously it's totally contingent on that legislation coming in," he added. "It's a big piece for us."

Trading in the iconic Grafton Street cafe last year was largely in line with 2009, which saw turnover decline by a third, largely as a result of lower average transaction values.

Daytime trade held up in 2010, but evening custom was weak, with consumers curtailing discretionary spending and city centre footfalls remaining subdued.

According to Mr Cahill, menu innovation will help stimulate consumer demand.