DVD store reports profit of €300,000

HOME ENTERTAINMENT group Xtra-vision made a profit of €300,000 in the 12 months ended January 29th after emerging from examinership with a €5 million annual saving on its rent bill.

Accounts for the group, which has 165 stores throughout Ireland, show that in its last financial year it made a profit after tax of €300,000, compared with a loss of €3.5 million over the previous 12-month period.

Earnings before interest, tax and write-offs were €2.1 million in 2012, compared with a loss under the same heading of €200,000 last year.

The High Court placed the company in examinership in April 2011 after insurers withdrew trade credit cover from the group and landlords refused to cut rents.

The company emerged from the process three months later with a rescue plan that allowed it to exit 16 leases on vacant or non-trading properties and reduced rents on its stores in the Republic.

The notes to the accounts show that it was able to cut its rent bill by almost €5 million to €6.8 million from €11.7 million as a result of the rescue plan, which the High Court approved in July.

Along with this, its shareholder, Birchall Investments, agreed to invest further in the business. In August, Xtra-vision drew down €2 million of a total of €8 million that the shareholder made available to the company.

The remaining €6 million was held in deposit accounts charged in Xtra-vision’s favour until December 23rd, when the charge over the cash was released as Xtra-vision did not require the extra funds.

The accounts state that the increase in VAT to 23 per cent from 21 per cent in January of this year has had a negative impact on the business and retailing generally.

The company also warns that piracy, both physical and online, constitutes one of the main risks to the business.