Bewley’s cafe on Grafton Street in Dublin made a loss of €1.7 million last year due to Covid-19 lockdown restrictions and not being able to secure a rent reduction from its landlord, Johnny Ronan’s Ronan Real Estate Group, new accounts show.
A note to the accounts for Bewley’s Cafe Grafton Street Ltd states that while its directors “expect” the company’s parent entity – coffee group Bewley’s Ltd owned by artist Paddy Campbell – to provide “sufficient discretionary financial support to enable” the cafe business to “continue to operate as a going concern for the foreseeable future” this had not been “formalised” at the time the financial statements were signed off on November 10th.
As a result, there exists a “material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern and that the company may as a consequence be unable to realise its assets and discharge its liability in the normal course of business”, the accounts state.
The cafe posted turnover of just under €1.2 million last year, up from €990,000 in 2020, when the pandemic first impacted on the economy. However, costs of near €2.7 million, including rental costs to Mr Ronan’s company of just under €1.5 million, and an interest charge of €202,000 pushed the company into the red.
The level of rent charged on the Grafton Street cafe has been the subject of dispute between Bewley’s and Mr Ronan over the years, with the coffee group failing to secure a reduction. The cafe business had accumulated losses of just more than €33 million at the year end.
The company received €786,000 in wage subsidies and other Covid-19 supports last year, up from €164,000 in 2020. It employed 38 staff in 2021.
The accounts also note a legal dispute with RGRE over the transfer of ownership in December 2020 of certain “decorative stained-glass panels” by the artists Harry Clarke, Pauline Berwick and Jim Fitzpatrick to its parent company, Bewley’s Ltd, to “enable the provision of discretionary financial support” to the cafe by its parent.
RGRE disputed this transfer, claiming ownership of the artworks, with the matter heard before the Commercial Court earlier this year. A judgment on the matter is awaited.
No comment was available from Bewley’s on the accounts.