Deals don’t pay off for Groupon’s Dublin-based subsidiary
Recently filed accounts show a €5.7m loss last year compared to €9.9m profit in 2014
Turnover at Groupon International Limited’s Dublin unit increased from €108 million to €123 million, but cost of sales jumped from €94 million to €115 million.
Daily deals site Groupon’s Dublin-based international operation fell into the red last year due to a sharp rise in administrative expenses and increased cost of sales.
Recently filed accounts show Groupon International Limited, which employs more than 100 people in Ireland, recorded a €5.7 million pretax loss last year, compared to a €9.9 million profit in 2014.
Turnover increased from €108 million to €123 million while gross profit fell from €13.9 million to €7.5 million as the cost of sales jumped from €94 million to €115 million due to continued investments in property and equipment.
According to the latest accounts for Groupon International, which provides affiliates with access to intellectual property (IP) and related support functions, €82.6 million of revenue last year derived from royalties, down from €90.7 million a year earlier. An additional €40 million in turnover came from marketing-related activities, up from €17.5 million in 2014.
“The company has significant financial resources together with cashflows from operations and parent company support. As a consequence, the directors believe that the company is well placed to manage its business risks successfully,” it said.
However, the company has experienced significant trading difficulties in recent years with its stock falling by as much as 70 per cent at one point last year. Groupon’s share price has since rebounded somewhat despite it announcing largely flat revenues of $2.2 billion for the first nine months of 2016 as its net loss jumped to $142 million from a $67 million profit a year earlier.