Profits at Eason down by €300,000 to €2.3 million
Group revenues at Irish-owned book and stationery retailer fall 7.1% to €227m during ‘challenging year’
A shopper in Eason on O’Connell Street, Dublin. Retail revenue in its core market was down 5.6 per cent. Photograph: Dave Meehan
Irish-owned book and stationery retailer Eason & Son has recorded a net profit after tax of €2.3 million in its financial year to January 2014, compared with €2.6 million the previous year. Eason Group revenues, however, were down 7.1 per cent to €227.4 million, in what the company called a “challenging year”.
Retail revenue in Eason’s core Republic of Ireland market was down 5.6 per cent on a like-for-like basis, with its franchise business down by 8 per cent, and its wholesale arm down 18 per cent. The company said airport revenues fell by €2.3 million due to its exit from Terminal 1 in Dublin Airport.
South African exitThe net profit of €2.3 million included the positive impact of the write-back of provisions relating to its exit from South Africa of €1.6 million and the closure of the company’s superannuation pension scheme of €5 million.
Eason made an operating loss of €200,000 before exceptional items. Including exceptional items and joint ventures it recorded an operating loss of €3 million, which included one-off costs such as €2.8 million relating to redundancies and property impairments.
In a review for the shareholders, chairman James Osborne said: “2013 was a challenging year for Eason as the recovery in the domestic economy failed to gain real momentum and further austerity measures continued to impact on consumers’ disposable incomes.”
Mr Osborne said Eason’s core books and news markets “continued to contract” because of the “migration online and to digital formats”. It was “more optimistic” about the current year on the basis of stabilising sales in the first six months. “Consumer sentiment is stronger than in previous years but this has yet to translate into a sustained period of increased consumer spending.”
Eason said it had successfully refinanced its facilities with Barclays Bank for three years, and secured new credit lines of up to €20 million.
‘Heavy lifting’ doneIn an interview with The Irish Times, Conor Whelan, Eason managing director, said he believed the “heavy lifting” in terms of restructuring the business was over, and he hoped to now focus the company on new revenues and maintaining an appropriate cost structure.
Mr Whelan outlined a number of initiatives that Eason was introducing to grow its revenues including developing its website, new concepts aimed at teenagers and brain development products. He said Eason planned to open five new franchises, adding to its existing network of 35 company owned outlets and 29 franchises.
Eason, he said, had decided not to pay a dividend to its 235 shareholders this year. “We are just coming out of the restructuring phase and hopefully moving into the sustainability arena. In light of the cost restructuring [a dividend] wouldn’t be appropriate.”
Eason completed a corporate restructuring during its financial year which split the business into a property and an operating company. Mr Whelan said this was done to make its corporate structure more effective and did not signal anything more such as selling part of the business.
“If at the appropriate juncture there is an appetite among shareholders to look at other options, then we will. There is no agenda with the board or coming from the shareholders in relation to what are those options,” Mr Whelan said.