Eason back in the black and preparing to expand

Irish-owned book and stationery retailer and distributor Eason returned to the black last year by recording a pretax profit of €3.1 million for the 52 weeks to the end of last January.

This compared with a loss of €6 million in the previous year and marked the first time since 2008 that the company had recorded a profit, according to accounts provided to The Irish Times.

The turnaround in the bottom line performance was driven largely by payroll savings of €3.1 million from a restructuring plan that has reduced its employee headcount by 224.

On a full-year basis, these savings are expected to total €6.1 million.

Exceptional costs
In addition, Eason did not record any exceptional costs last year. In the year to the end of January 2012, the retailer posted an exceptional charge of €13.4 million, relating to redundancy costs and property impairments.

However, the liability in its defined-benefit pension schemes almost doubled last year to €9.5 million. It is currently in discussions with employees and trustees about future funding of the schemes.

Accounts for Eason & Son Ltd presented to shareholders last night at its annual meeting show that turnover from continuing operations had declined 3 per cent to €244.9 million in the 52 weeks to the end of January 2012. This reflected continued weak consumer sentiment.

Like-for-like retail turnover in the Republic, excluding airports and online, declined by 5.9 per cent last year and by 4 per cent in Northern Ireland.

Eason’s airport revenues fell by €700,000 to just under €10 million. The company is currently tendering to retain its four shops in Terminal 1 at Dublin Airport.

In spite of the difficult trading environment, Eason has invested €30 million in the past few years on a number of initiatives to grow the business and improve its performance.

This has included the launch of a new online sales offering, a loyalty card (it has 190,000 members), a major store refurbishment programme, and extensive staff training.

IT upgrade
It is currently in the midst of a €12.5 million upgrade of its IT systems and will open six additional franchised stores this year, including three former Hughes & Hughes outlets.

Commenting on the results, Eason chief executive Conor Whelan said: "It continues to be challenging. We anticipate generating a profit this year but a lot depends on trading during the back-to-school and Christmas periods, which are our busiest trading times." The accounts show that Eason paid off its term loan with Barclays Bank in the year to the end of January 2012 with a new three-year credit facility for €23 million secured. The company had no net borrowings at the end of last year.

It paid a dividend of €500,000 to its 230 shareholders last year, half the level paid out in the previous 12 months.

Eason paid corporation tax of €526,000 in the year to the end of January 2013 compared with €153,000 in the previous period.