Web Summit group swings back into profit after pandemic losses

Paddy Cosgrave’s Web Summit group returned to profit in 2021 after losing more than €5 million in 2020, having cancelled or postponed a number of in-person events due to the pandemic.

Manders Terrace, the parent entity within the group in which Mr Cosgrave now holds an 81 per cent stake, filed its 2020 accounts with the Companies Registration Office this week.

The company is at the centre of a number of high-profile legal actions involving Mr Cosgrave and his former business partners and Web Summit co-founders David Kelly and Daire Hickey, who co-founded the annual tech event.

Its latest accounts show the group lost more than €5.2 million in 2020. Turnover declined dramatically from nearly €48 million in 2019 to just €17.4 million after the group was forced to cancel the annual in-person tech event in Lisbon and move it online.

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But the company’s 2021 accounts show the Web Summit group swinging back into profit. After-tax profits at Manders Terrace topped €3.8 million last year after the in-person event returned to Lisbon last November. Some 42,700 people attended, according to Web Summit’s own estimates, paying up to €24,900 each for tickets.

At €31.8 million in 2021, group turnover had yet to return to pre-pandemic levels.

The 2021 accounts note that Mr Kelly resigned as a director of Manders Terrace in April 2021, some six months before Mr Cosgrave filed a legal action against him in the United States, accusing him and Patrick Murphy of secretly establishing an investment fund called Amaranthine Partners to profit from the company’s success.

The 2021 accounts for Manders Terrace note that it entered an agreement to invest $2 million into Amaranthine.

Mr Kelly, who holds a 12 per cent stake in Manders Terrace through his company Graiguearidda, subsequently brought Irish High Court proceedings against the company and his former business partner, Mr Cosgrave, last October. Alleging shareholder oppression, Mr Kelly has accused Mr Cosgrave of aggressive and coercive behaviour and claimed Mr Cosgrave used Web Summit resources, including cash, for his own mainly political endeavours.

Former Web Summit director Mr Hickey is also pursuing a High Court action against Manders Terrace and Mr Cosgrave over an alleged breach of a profit-sharing agreement.

Mr Cosgrave denies the allegations.

The 2021 accounts do not mention any of these legal proceedings.

Commenting on the results, Mr Cosgrave said: “We lost an enormous amount of money in 2020, but we did so in the belief that, if we could just get through that year, we’d emerge as a brand and company even stronger than before.”

This article was amended on June 16th.