Tuesday 10 December 2019

Profits on the boil at Insomnia coffee chain

Stock photo: PA
Stock photo: PA
John Mulligan

John Mulligan

OPERATING profits at the Insomnia coffee chain that was co-founded by entrepreneur Bobby Kerr soared to €4m last year.

The figure compares with €848,000 the year before, when the business was hit by almost €3.4m in exceptional costs.

These exceptional costs in 2017 related to directors' pension costs.

Insomnia's revenue last year hit €30.9m, which compared with €28.7m the year before, according to accounts just filed for its parent firm, BHJ Holdings.

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Of its turnover last year, €28.5m was generated in Ireland, with the remainder coming from the UK. The company employs about 440 people.

No dividends were paid last year, compared with the €5.2m that was paid in 2017.

Shareholders in Insomnia include Spar and Mace retailer John Clohisey, and the chain's CEO and co-founder, Harry O'Kelly.

Mr Kerr built the Insomnia chain over the space of 20 years, helping it to survive a downturn that put huge pressure on many similar retailers and service companies.

Before he sold his stake to the other shareholders in 2017, Mr Kerr had been serving as chairman.

That mantle then fell to Mr Clohisey, who retains that role.

"This is a very bittersweet day for me," said Mr Kerr when he announced his departure from the group two years ago. "Insomnia has been such a big part of my life for nearly two decades and I am very proud of what I achieved here.

"I will miss the work and the people, many of whom I have formed life-long friendships with. However, I look forward to the next chapter for me and my family."

The newly filed accounts for Insomnia's 2018 financial year show that despite the big profit recorded for the period, it had a shareholders' deficit of €7.5m at the end of last December.

Last month, Insomnia opened its latest store in Naas, Co Kildare, and it has opened a number of new outlets so far this year.

It has a total of about 150 coffee shops, but also has more than 400 self-service coffee docks at petrol stations and other retail outlets.

The chain has inked deals with big-name retailers such as Primark, which operates as Penneys in Ireland, and Debenhams, to operate Insomnia cafes within their stores.

Last month, it was reported that the Insomnia shareholders could be in line for a €12m windfall, following a balance sheet restructuring that could free up cash for distribution to them.

Earlier this year, Mr Kerr signed a new two-year contract with the radio station Newstalk.

He continues to present the station's popular 'Down to Business' show on Saturday mornings.

Irish Independent

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