Eason posts biggest profit since 2006 despite fall in revenues
Irish retailer records after-tax profit of €4m last year, largely due to property valuations
First-round bids for the O’Connell Street shop are due on August 14th with a price of €24.5m being sought by real estate agent Bannon. Photograph: Dara Mac Dónaill
Irish books retailer Eason last year recorded its highest profit since 2006 but turnover was down due to the challenging trading environment that continues to face its bricks and mortar retail business.
The latest accounts for Eason Holdings plc, which were sent to shareholders this week, show it made an after-tax profit of just under €4 million in the year to January 27th, 2019.
This compared to a loss of €3.9 million a year earlier and reflected the benefit of a €3.7 million tax credit relating to property valuations.
Its revenues fell by 5.1 per cent to €130.4 million. In his letter to shareholders, Eason chairman David Dilger said the company continued to operate in a “challenging retail environment”.
Turnover in the Republic fell by 3 per cent to €115.6 million though its retail revenues were on a par with the previous year. Wholesale revenues declined by 36 per cent year on year.
In Northern Ireland, turnover declined by 18.5 per cent to €14.8 million, with the company closing stores in Newry and Craigavon.
Mr Dilger said its retail turnover was affected by snow storms, which forced Eason to close its shops for three days. This was followed by an “unusually warm summer which had an equally adverse impact on revenues”, and concluded with disruption from Black Friday sales in November, which hit trading over the usually lucrative Christmas season.
On a more positive note, digital revenues rose by 12.6 per cent to €8.2 million. The company invested €2 million last year in its ecommerce platforms.
Mr Dilger also outlined the progress made in Eason’s corporate restructuring, which involves spinning out its retail and property assets into separate legal entities.
It closed the year debt free with cash balances of €31 million. This included €2 million in cash from trading activities and €19 million from the sale of its St Margaret’s warehouse in Dublin.
This was part of a wider plan to sell a portfolio of properties to generate cash for reinvestment into the retail business, and to provide a financial return for shareholders.
Properties in Galway, Cork, Tallaght, Tralee, Clonmel, Clonshaugh, Carlow and Dún Laoghaire were sold, although Eason continues to operate from the sites.
Four sales processes are under way: at Blanchardstown, Limerick, Athlone and its flagship store at O’Connell Street in Dublin. First-round bids for the O’Connell Street shop are due on August 14th with a price of €24.5 million being sought by real estate agent Bannon.
Eason plans to lease back the O’Connell store as part of the sale agreement.
The retailer has also agreed with staff to wind up its defined benefit pension schemes on both sides of the Border, and has agreed pay deals in both the Republic and the North. Staff in the Republic were due to receive a pay rise of 2 per cent this month.
Eason’s board approved a dividend for the year of €500,000 or 2.5 cent per share for shareholders.