Eason increases profits despite drop in revenues due to Covid restrictions

Online sales and Dubray books division helped retailer through six-month closure

Eason’s flagship store on O’Connell Street. The retailer has yet to find a buyer for the property. Photograph: Dara Mac Dónaill

Eason’s flagship store on O’Connell Street. The retailer has yet to find a buyer for the property. Photograph: Dara Mac Dónaill

 

Irish retailer Eason increased its profits last year in spite of a 27 per cent reduction in revenues due to Covid-19 lockdown restrictions.

Eason shareholders have been told that turnover declined from €130 million to €94 million in the 53 weeks to the end of January 2021, a period when the company’s stores were shut for about six months.

Eason chairman David Dilger said the combined effect of cost adjustment measures and positive trading from its online division and the Dubray books business that it acquired in February 2020 helped the group to post an after-tax profit of €759,000 during the period, up from €376,000 a year earlier.

The company received more than €10 million in supports from the Government, local authorities and landlords, while also securing €3 million in pay cuts. This included €3.5 million via the State’s employer wage subsidy scheme, while a temporary rent “concession” of €2.7 million was agreed with landlords.

Employees

The number of employees fell during the year to 592 from 633 previously. Eason closed its business in the North in August 2020. This unit achieved sales of just €1.8 million last year versus €14.4 million in the previous 12-month period.

“The physical retail business in NI was very hard hit by Government-mandated store closures, periods of restricted operations and ongoing social distancing requirements while UK government supports did not prove equally effective in offsetting these impacts,” Mr Dilger said.

At an ebitda (earnings before interest, tax, depreciation and amortisation) level, Eason’s earnings from continuing operations was €5.6 million, up from €1.8 million a year earlier. No dividend was paid to shareholders.

While its bricks-and-mortar business was subjected to lockdown restrictions, Eason recorded a threefold increase in its online sales. Online accounted for 22 per cent of group revenues during the period and this performance has continued to be “strong” in the current year.

Financial targets

Mr Dilger said Dubray, a specialist book retailer, had exceeded its financial targets last year in spite of Covid restrictions, with plans in place for two store openings in the coming months in Cork and Dundrum.

Brexit customs issues and supply chain problems have also affected its supply of books from the UK. “We will be challenged with timely supply of product over the coming months and, despite putting comprehensive contingency plans in place for our product, the release date nature of books could mean that some titles will not be available in Ireland the same day as the UK,” Mr Dilger said.

He has told shareholders that there is currently “no active purchaser interest” for either its flagship O’Connell Street store or its Blanchardstown property, which he said was “unsurprising given the prevailing commercial property market conditions”.

Eason split its retail and property operations into separate legal entities in recent years, selling all of its company-owned outlets except for those sites. Some €19 million of the proceeds was used to capitalise the retail business, with €20 million paid out to its 230 shareholders.

Mr Dilger said Eason’s retail business had “emerged in good financial health, leaving us in a strong position over the next 18 months to address the ongoing and fundamental changes taking place in our marketplace”.