Thursday 14 December 2017

Loss-making Eason faces boardroom shake-out

Tom Lyons

Eason, a bell-weather company for Irish book, newspaper and stationery sales, made an operating loss of €5.3m dragged down by exceptional costs of €13.4m. The company, which faces a boardroom shake-up later this month from ex-directors who are seeking representation, saw its turnover for the year ended January 2012 fall by 10.6 per cent to €266.1m.

The company has positioned itself for future growth, however, after a redundancy programme that has taken €6.1m off its annual wage bill; the exit from non-core businesses in the UK and South Africa; and the agreement of a three-year bank facility with Barclays Bank and Ulster Bank. Eason said it would pay a dividend of €1m to shareholders -- the first time it has done so since the bust began.

Eason will present its results to shareholders at its 124th annual general meeting on June 26.

Six former directors, including ex-managing directors Basil McAllister and Gordon Bolton plan to push for between two and four directorships at this meeting after they expressed concerns about the strategic direction of the group to other shareholders.

James Osborne, the chairman of Eason who until recently also chaired Independent News & Media, the publisher of the Sunday Independent, has told shareholders that its board had opened up a new shareholder non-executive director position.

"Against the backdrop of a very challenging economic and trading environment, Eason has made significant progress during the year on the rollout of its strategy to make the business more resilient and competitive," Osborne said in a detailed review for shareholders.

This positioned the company, he said, to "exploit the economic upturn when it arrives". He said Eason was now "stronger and more sustainable", and noted it had reduced its bank borrowings to nil by its year-end.

In the Republic of Ireland, Eason saw its turnover fall by 4.6 per cent to €117.7m, excluding its units in Dublin Airport. The performance was strong relative to its markets, which is down 10 per cent.

Sales from Terminal 1 in Dublin Airport fell by 36 per cent to €10.7m due to the migration of Aer Lingus and long-haul flights to Terminal 2, where Eason has no shops. Eason said its franchise business was helping to offset declining sales, with four new franchise stores opening during the period.

Eason took a one-off property impairment of €3.8m as part of a multi-year aggressive writedown of its property assets. Eason employs 760 people in Ireland and 217 people in the UK and South Africa in 2012.

The firm sold its South African unit for a €2m profit during the period and 14 properties in the UK related to its defunct British Bookshops subsidiary at a profit of €1.6m.

Sunday Indo Business

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