The hospitality and service sector had been hit hard by the recession, with downturns ranging from 25% to 35%, Southern founder Roger Fewtrell said yesterday.
The company's annual growth rate of more than 30% per annum for most of the past 20 years had stalled at 0% for 2008 and 2009.
"The [hospitality] industry has been flat. Since hitting a black hole last August we have had to restructure," Mr Fewtrell said.
Privately-owned, 20-year-old Southern has 13 branches nationwide and 190 staff, making it the largest hospitality-sector provider in the country.
It is 60%-owned by Mr Fewtrell, with about 100 staff holding the 40% balance of shares.
In October last year, for the third time, Southern Hospitality won the Deloitte Fast 50 index, being judged the country's fastest-growing employer, for the year to March 2008.
Having opened three new branches and hired 50 new staff earlier in 2008, Southern had since last August lost about 45 staff, split between a non-replacement policy as some left and redundancies, Mr Fewtrell said.
While there were "small" after-tax profits for 2008 and 2009, shareholders were not paid dividends in 2008 and it was "unlikely" for 2009, he said.
However, along with the reduction of 45 jobs, Southern had reduced its stock inventory by $4.5 million and reduced borrowings by $7 million.
Mr Fewtrell was confident the zero growth of the past two years would become a single-figure percentage gain in 2010.
"We're happy at the moment, because with the downturn we are increasing our market share," he said.
Since August, the company had "refocused" on its customer base, because of the downturn in cafes, bars and restaurants, and had built up new clients in government departments, transport, education, maraes and rest-homes, which relied less on discretionary spending, Mr Fewtrell said.
Founded in 1989, Southern supplies a wide range of hospitality-related products and services, including hotel and motel supplies, chefware, glassware, tableware and cleaning equipment to sectors as diverse as bakeries, prisons, airports and universities.
Sales revenue for the past month was likely to be up 18% on budget, or $700,000, while the previous month's revenue was 13% ahead of budget.
He said all three new branches had been retained in the chain of 13 outlets, which includes its original Dunedin head office.
