Irish books and stationery retailer Eason is planning to distribute up to €14 million from its surplus cash in payments to shareholders over the next 12 to 18 months. This has been facilitated by strong trading by its Eason and Dubray brands, tight management of costs and a healthy level of cash reserves.
The retailer has informed shareholders of its plan to pay a €4 million dividend from its profits for the current trading year, which runs to the end of January 2025, while also releasing €10 million via a share buyback scheme. This would bring the level of payments to shareholders to €65.7 million since 2020, including funds released from the sale of various properties in recent years.
As a first step Eason plans to pay the €4 million dividend in December, four times the level of the payment a year earlier. It is also proposing a share buyback scheme, to be launched next March or April, of up to €10 million by directly acquiring stock from shareholders. This will comprise two tranches – about €6 million next spring and the balance in late 2025 or early 2026.
The business was independently valued at €76 million by Mazars last year. At present there is little liquidity in the shares given the tight nature of the share register and the fact the stock is not publicly traded.
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Eason has about 230 shareholders and an extraordinary general meeting will be held in the spring of next year to approve these distributions. “This can be done while still maintaining sufficient cash within the business to pursue our strategic plans,” Eason chairman David Dilger has told shareholders in a letter updating them on Eason’s trading performance.
Latest accounts for Eason Retail Plc show that group turnover rose by 9.4 per cent year-on-year to €123 million for the 12 months to the end of January 2024. Its Ebitda (earnings before interest, tax, depreciation and amortisation) rose to €8.4 million from €7.1 million a year earlier. However, its pretax profit more than halved to just under €2 million, following a €3.3 million fall in the book value of its O’Connell Street store.
Eason’s online business had a strong year, with turnover up 13 per cent to €17.7 million and its Ebitda almost doubling to €1.6 million. Dubray’s turnover rose by 13 per cent to €15.9 million, including a €4.3 million contribution from new stores. The Eason group now operates 43 stores, of which 15 are Dubray bookshops.
On current trading, Mr Dilger noted that expected increases in the minimum wage over the next two years, plus this year’s rise, would likely add €4.7 million to its payroll costs by 2026. “In response management has been driven to improve back-of-house process efficiency across all areas of the business to ensure these particularly onerous cost increases are mitigated to more normal and sustainable levels.”
Looking ahead Mr Dilger noted that a new three-year strategy is being implemented, and said he was “confident but not complacent” about the group’s prospects.
“Like-for-like revenues are relatively stable across the business, but as the anticipated level of acquired growth drops back in the years ahead we will expect more from the existing retail estates, both Eason and Dubray. Benefiting from our investment to date, our core online revenues took a step change in performance over the last 12 months, which highlights the continuing potential to grow this marketplace.”
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