A “PECULIAR weakening in revenue for no particular reason” first became evident at Celtic Bookmakers in August 2007, Ivan Yates said yesterday.
It was an early warning sign of the tidal wave that was to wash over the Irish economy in the three years that followed.
“In January ’08, I decided we were going to cease all capital expenditure and all growth because I felt it was time to put the seatbelt on in business terms,” Mr Yates said.
Having expanded aggressively during the boom years, Celtic Bookmakers’ revenue peaked at €189.5 million in the year to the end of July 2008.
It had a chain of about 60 shops in Ireland and Britain.
Within a year, turnover was down to €152 million and it was €1.3 million in the red as the recession began to bite. Last year, turnover fell to €122 million and its losses widened to to €1.5 million.
“It has been a steady, continuing downward slide of turnover and it was right across the shops,” Mr Yates said yesterday.
Yates closed 12 shops and reduced the cost base from €17 million to under €12 million. Pay was cut and bonuses scrapped. Staff agreed to clean the shops themselves to save money.
Mr Yates stepped down from his executive role in April 2009. He had been busy trying to find a white knight for the business for many months before that.
In October 2008, he thought he’d secured a deal with British bookie William Hill. “I had extensive discussions with William Hill to effect a merger. Their estate of 45 [Irish] shops would be complemented by ours.
“I was very close to making progress on that deal in London. The next day, after a meeting in October, the [Irish] betting duty went up to 2 per cent and they absolutely took fright.”
“I felt I could put an Irish shamrock on the William Hill brand and was very anxious to pursue that. There was a real strong consolidation play there.”
Mr Yates also approached a “number of different individuals” but this came to nothing.
He talked to BetPack, the grouping of independent bookmakers formed about a year ago to launch online betting to their customers, something that the big boys like Paddy Power and Boylesports have been doing for years. However, they had no interest in buying his shops.
Celtic Bookmakers never went online. Yates yesterday cited the projected €10 million cost as being too high.
“I just didn’t have that type of money and I took the view that instead of spending €1 million on doing a poor job it would be better to make the best of my resources into telebetting and retailing.”
In a last-gasp bid to generate some cash, Yates sold his two best-performing shops last month. The sale of their Lombard Street outlet in Dublin to Paddy Power and the Enniscorthy branch to Boylesports raised between €500,000 and €750,000. It kept the bank at bay but was not enough to save the business from slipping into receivership.
Money generated by the business was reinvested to fund its growth – about €25 million over the years, including €6 million in loans from AIB.
He concedes that he overpaid for acquisitions – Celtic spent €4 million buying the Joe Molloy chain in 2006 and about €2.5 million on Ubet the following year.
“Even though we transformed those and doubled their turnover . . . obviously we paid too much and they’re now worth only a fraction of what they were worth.”
He also regrets not expanding at an earlier stage. “The real opportunity was before the year 2000. I suppose I tried to do too much in terms of pursuing a political career and a business career. But when I put the pedal to the metal in the noughties it was just the wrong time to be doing it.
“But I take full responsibility and I’m neither whingeing nor blaming anyone [else].”
Might the bookie-turned-broadcaster return to politics to help pay the bills?
“No. Given my financially uncertain position, it is not applicable to go into politics in those circumstances,” he said.
“Secondly, my mojo is sufficiently dented at this time that the last thing I’m thinking of at this moment is going into politics.”