THE BELFAST-BASED group that operates the Kentucky Fried Chicken (KFC) franchise across Ireland and Scotland incurred a pre-tax loss of £4 million (€4.4 million) in 2008, despite an increase in turnover at its restaurants.

According to accounts just filed with Companies House in the UK, Herbel Restaurants Ltd sustained the loss after incurring a £6 million writedown of the company’s property portfolio in response to the decline in the property market.

The group’s operations include 16 KFC outlets in the Republic.

Separate accounts filed to the Companies Office by Dublin-based subsidiary, Herbel Restaurants (Ireland), show that its pre-tax profits dropped by 25 per cent to €1.75 million in 2008.

The operator of the KFC franchise in the Republic saw its turnover decline marginally from €25.6 million to €24.4 million.

The parent company, Herbel Restaurants Ltd, operates one of the largest KFC franchises in Europe. The group’s two directors are Belfast businessman Michael Herbert and his wife Lesley.

Group accounts show that turnover increased in 2008 by 3 per cent from £62.5 million to £64.4 million. The pre-tax loss of £4 million compares to pre-tax profits of £4 million in 2007.

However, turnover of £53.5 million from its restaurants represented a 13 per cent increase on its £47 million from restaurants in 2007.

The directors said “the KFC franchise continues to trade strongly despite the economic downturn”.