A company set-up by the county council to provide lunchtime meals for school children in Hertfordshire has made a profit – after three years of making a financial loss.

Hertfordshire Catering Limited was set-up to provide healthy and nutritious meals to pupils in schools and colleges across Hertfordshire and beyond.

It supplies more than 14million meals a year to around 450 schools and commercial sites.

And any profits made by the company can be invested into county council services.

For the past three financial years, accounts show that the company has made annual losses – of £1,272,833 (2022/23), of £9,576 (2021/22) and of £590,567 (2020/21).

And last year the council agreed to offer the company a time-limited 'rolling credit facility' of up to £1.5m for the next 18 months.

But now latest accounts, lodged with Companies House, show that in 2023/24 the company made a profit of £579,222.

The return to "a level of normality, and profit" – following "a number of uniquely challenging years of trading" – is acknowledged in the strategic report accompanying the accounts.

But that report also highlights a number of challenges faced by the company during the 2023/24 period.

Food costs were are said to have been a pressure for the first part of the year – with a number of trading days lost due to teachers' strikes and closure days, including Coronation Day.

The report also points to the £2.53 it receives in government funding for Universal Infant Free School Meals.

And in welcoming the company's return to profit, a spokesperson for Hertfordshire County Council acknowledged that for the company the "future remains difficult".

"The county council set up Hertfordshire Catering Limited (HCL) to provide healthy and nutritious meals to pupils in schools and colleges across Hertfordshire and beyond," said a statement issued to the Local Democracy Reporting Service by the county council.

"HCL's number one priority is to maintain a quality offering for the pupils it serves, whilst school meals services in England are facing a huge funding challenge.

"Like many businesses, HCL has experienced an unprecedented level of trading and cost turbulence over the last four years, but through close collaborative working with their school customers and Hertfordshire County Council they have been able to weather these challenges and return to a sustainable position in 23/24.

"The future remains difficult, with little or no increases in funding for school meals meaning resources continue to fall further and further behind inflation and cost increases – however HCL will continue to work to put pupils first.

"We have supported HCL through this difficult period and we are pleased that they have returned to profit, establishing a more sustainable financial position while continuing to provide healthy and nutritious meals"

Before the pandemic, in 2019/20, the company was reported an annual profit of £1.2m – giving the county council a dividend of up to £1m a year.

But according to the director's report appended to the 2023/24 accounts no dividend was paid last year (2023) – and, it says, they will not recommend a payment of a final dividend this year.