Eason looks to increase sales after restructuring

Irish-owned book retailer Eason expects to grow its sales this year and to post a profit as the business completes its restructuring following the economic crash in late 2008.

Speaking to The Irish Times on Tuesday, the company's managing director Conor Whelan said: "We hope to generate an improvement in our ebitda [earnings before interest, taxes, depreciation and amortisation] and we'd expect to move into net profit territory as well."

He said revenue growth so far this year has been between 4-5 per cent with “modest growth” on a like-for-like basis.

“We’re hoping for a very good back-to-school period,” he said.

Results for the year to January 25th, 2015, which were provided to the company’s 235 shareholders last week, show Eason’s sales declined by 1.1 per cent to €225 million.

Sterling

On a like-for-like basis, sales in the Republic rose by 0.1 per cent but revenues in sterling in Northern Ireland declined by 1.1 per cent.

Its airport sales declined by €5.7 million due to the loss of its contract at Dublin Airport. Eason exited Cork Airport in January 2015, and this will impact revenues in the current financial year by €1.8 million.

The retailer posted a net loss of €1.9 million for the year compared with a profit of €2.3 million in the previous 12-month period. However, the results for the year ended January 26th, 2014 were flattered by a €5 million exceptional gain on its pension scheme.

On a positive note, the business generated cash last year and Eason increased its earnings before interest, tax, depreciation and amortisation by €200,000 to €5.8 million. As in the previous year, no dividend was declared for shareholders.

Mr Whelan also scotched recent media reports that Eason has been put up for sale and could be the subject of a management buyout following the appointment of IBI Corporate Finance and BDO as advisers.

Review

“Our advisers were never engaged to sell the business or even look at it as an option,” he said, adding that their roles were “purely to review our corporate restructuring plans and advise us on their implementation” .

The group has set up a new entity called Eason Ltd to separate its trading and property assets.

“We will migrate all of our employees, our wholesale customers, our franchise customers and our suppliers into our new entity,” he said.

“Over time this structure might facilitate us tackling some of the other legacy costs in the business, the non-pay-related costs.”