DBC Foodservice has blamed the loss posted in its latest results on a combination of heavy investment in its business and fewer people eating out.

The company recorded a pre-tax loss of £4.95m in the year to 25 March 2011 against a profit of £1.26m the year before, according to accounts filed at Companies House.

However, sales rose 10.6% to £302m as extra business from a £25m-per-year distribution deal with SSP and an £8m distribution deal with Barracuda Group filtered through.

“To facilitate this and future growth, the company has made significant investments in infrastructure,” finance director Leo Weston wrote in the accounts. “The combination of this investment together with the impact of market conditions has resulted in a reduction in the company’s profitability.”

DBC invested in a new depot at Darlaston during the period and set up a dedicated customer service team in Liverpool for the SSP account.

MD Chris Horne warned of challenges in the year ahead. “Fewer people are eating out, exacerbated by cuts and less spending in the public sector,” he said.

“On top of this there is no end in sight to the escalating cost of diesel and the continual price increases from manufacturers - neither of which help chefs and caterers.”

However, high-profile events in 2012 represented a big opportunity for foodservice, with the long weekend of the Queen’s Diamond Jubilee “bound to create a feel-good factor for consumers who are likely to treat themselves to extra meals out”, he said. DBC also expected to benefit from extra traffic to customers Rail Gourmet and SSP as Brits stay at home for summer.

The company had the right infrastructure and prospects to continue to grow and to return to “substantial” profits, Weston added.