Bookseller Waterstones almost doubled its sales and more than trebled its profits last year as it bounced back from the Covid-19 pandemic.
Waterstones Booksellers Ireland, which is part of the wider Waterstones group, recorded sales worth €12.1 million in the 53 weeks ended April 30th, 2022, its latest accounts show. That figure was up from €6.3 million the year before.
The improvement in sales led to an operating profit of €3.3 million, which was up from €752,000 the year before. Profit after tax amounted to €3.2 million, which was up from €936,000. As of October 1st, 2022, the company held cash balances of €7.2 million.
The accounts show Waterstones, which operates Hodges Figgis in Dublin as well as outlets in Cork and Drogheda, Co Louth, received €756,000 from the State in Covid-19 supports, which was up from €527,000 the year before.
Sales and profitability “improved significantly” last year, the company said, having been adversely affected by the closure of stores due to Covid-19. Footfall and sales “continued to recover but remained depressed in some locations”.
The online business “continues to deliver a strong performance”. Waterstones successfully repurposed its distribution centre as an “online fulfilment operation”. Margins were lower due to shipping costs and the additional costs associated with social distancing measures.
The company does not have distributable reserves and therefore no dividend was paid or declared during the period.
In terms of risks and uncertainties ahead, the company noted the longer term impact of Covid-19 on customer behaviour, “particularly in relation to city centres”. Furthermore, it noted the “competitive nature” of its markets, with particular emphasis on the ecommerce strength of Amazon. It also raised concern about the general sensitivity of customer confidence and spending in an economic downturn.
The group’s directors concluded the company will continue to trade at levels which mean that they are able to meet their liabilities as they fall due throughout the coming year. They said this base forecast assumes there will be no further impact from Covid-19, with shops open and trading without restrictions.
The expectation is for shop sales for most stores to improve on pre-Covid levels in the year ending April 2023, with further sales improvement in the following year, along with the continued growth in online sales.
“Although Covid measures have impacted sales and provides a degree of uncertainty, the level of uncertainty has reduced significantly from last year, with future lockdowns judged to be improbable,” they said. “The most significant further impacts on the company may be on sales and overheads in relation to reduce consumer spending, and inflationary pressures, including increased energy costs.”
The company employed an average of 60 people during the period, which was one less than the year before. However, spending on staff, which includes wages and pension costs, was €1.9 million, which was up from €1.3 million the year before.