Insomnia coffee chain ‘severely disrupted’ by pandemic after profits rose in 2019

Board is confident in resilience of business model

The Covid-19 pandemic has resulted in a “severe disruption” of the Insomnia coffee chain business here.

Directors of the holding company for Insomnia, BHJ Holdings said Covid-19 hugely affected the performance of the group in 2020 “and is expected to have a significant impact on the 2021 performance too”.

The directors said that while the duration of the pandemic is unknown, they are satisfied that the company is taking all steps to ensure the business will trade through these difficulties.

Insomnia’s rapid growth in the Republic in recent years has resulted in the brand operating 170 stores, including franchises, and 500 sites with self- service machines. The business includes 75 on-street outlets, along with a presence in about 60 Spar stores.

The brand has also linked up with Meadows & Byrne, Eason, Maxol, Londis and Penneys as part of its expansion.

It operates 17 outlets in the UK.

A spokeswoman for Insomnia said on Thursday: “Covid-19 has and continues to have an enormous impact on our business with a significant number of stores temporarily closed.”

The spokeswoman said Covid has accelerated the roll out of the brand’s digital plans including a new online store going live in the next month which will feature a coffee subscription service.

She stated: “We continue to review the changing needs of our customers and are assessing the most appropriate business formats and locations for new coffee offerings including drive-throughs going forward.”

In a note attached to the company’s most recent accounts, it said the impact of Covid-19 on the group “is a decline in revenues from March 2020 due to closures and a restricted ability to trade our owned stores resulting in reduced Earnings Before Interest Tax Depreciation and Amortisation”.

The note stated that management has taken steps to mitigate the affects of the pandemic including the use of supports by governments.

Business model

The board is confident in the resilience of the business model to allow the company positively face the challenges ahead, the note read. The major disruption to the business caused by Covid-19 followed a strong performance by the business in 2019.

The accounts for 2019 show BHJ Holdings Ltd recorded a 12.5 per cent increase in profits in 2019 to €4.16 million. This followed revenues rising by 19 per cent from €30.9 million to €36.77 million.

The group's Irish revenues increased by €5.3 million or 19 per cent from €28.53 million to €33.9 million in 2019 while UK revenues increased by €488,000 from €2.38 million to €2.86 million. The company paid a dividend of €2 million to parent firm, Insomnia Coffee Ltd.

Gordon Deegan

Gordon Deegan

Gordon Deegan is a contributor to The Irish Times