Elverys Sports, founded in 1847, is the oldest sports store in Ireland. There’s an Elverys in most big towns in Ireland — places like Tullamore, Ballina, Tuam, Charleville, and Gorey. There are 54 of them in total.

And it is also something of a bellwether retailer, ebbing and flowing within the wider economic tide. Amid sustained losses and heavy debts between 2008 and 2014, it collapsed into examinership seven years ago and was acquired by its management team, led by Patrick Rowland. In 2019, the Staunton family, who ceded control during the examinership, bought back majority ownership.

Operating through a company called Dunkellin Investments, the family bought 61 per cent of the entire share capital of West Roxbury, the holding company behind the group, in a deal agreed and implemented before the network of shops shut down as a result of the Covid-19 pandemic last year.

But just how is it performing, and what outlook is it projecting? New accounts for 2019 show a company that has grown both revenues and profits – but also debt.

In 2018, the retailer had revenues of €77.8 million and made a pre-tax profit of €9,770. In 2019, revenues jumped to €86.4 million, and pre-tax profits increased significantly to €2.1 million. The swing in profits turned a 2018 retained loss of €1.8 million into a retained profit of €51,000 at the end of 2019.

However, there have been sizable movements of debt on its balance sheet. In 2018, it had short term bank debt – due to be repaid within a year – of €4.1 million. This was reduced in 2019 to €2 million. Overall, however, after long term loans are factored in, bank debt actually increased from €12 million to €15.3 million. Investors, meanwhile, were owed €7 million at the end of 2019, up from €6.5 million for the year before.

An assessment of its balance sheet shows assets increased to €30 million from €25.4 million during the year, although liabilities increased from €27 million to €29.8 million.

A note in the accounts makes reference to future acquisitions: “The net assets as at the 31^st December 2019 were still greater that half the issued share capital. The directors are prepared to fund the company in order for it to continue with its acquisitions. The directors have reasonable expectation that the company will have adequate resources to continue in operational existence for the foreseeable future thus they continue to adopt the going concern basis of accounting in preparing the financial statements.”

The directors also offer an outlook and some commentary on the pandemic: “In common with all companies operating in Ireland in this sector, the company faces increasing difficulty in dealing with the possible effects of Covid 19 and a no deal Brexit. The directors are of the opinion that the company is well positioned to manage these problems.”

Schuh: declining footfall and instore conversions

What happens to a major retailer if football at its shops falls by 4 per cent and in-store conversions drop by 11 per cent? The answer to that can be found in the accounts of Schuh Ireland, the Irish division of the international footwear business. For the year to the end of February 2018, the retailer had revenues of €30.9 million. However, this dropped to €27.8 million for the following year, a decrease of 9.2 per cent.

The company attributed the fall to a decline in footfall and conversions. The company also suffered on its profit line, following a €3.86 million intercompany write down from an unrecoverable debt from a sister company in Germany, which no longer trades.

The write down pushed the company into a pre-tax loss of €2.8 million, down from a pre-tax profit of €1.4 million for the year before. Equity shareholders’ funds fell from €4.7 million to €1.9 million as a result. The directors said that they expected turnover for the following year to be in line with 2019 figures. The accounts provide no guidance on the impact of the pandemic.

Exergyn and contingency liabilities

Earlier this year, Tom reported that a group of 93 private investors who have invested a combined €5.8 million in Exergyn, a potentially ground-breaking clean-tech start-up, had written to the company’s board and other interested parties expressing their dissatisfaction with the strategy being pursued by the company.

Tom has reported extensively on the issue. As he put it:

“The one thing all sides agree about however is that Exergyn has made huge advances in its mission to solve one of the biggest challenges in reducing climate change: how to cool and heat things in a way that doesn’t send destructive global warming-potential refrigerants into the atmosphere. But after that, there is division about the strategy being pursued by the company.”

New filings for the Dublin company made reference to the ongoing dispute under a section entitled ‘Contingent liability’. The accounts, for 2019, state that during the year the company undertook an internal review of its company secretarial functions and that as a result, compliance and administrative deficiencies were identified. “Plans have been developed to rectify the situation which requires the agreement of shareholders,” the document states.

“A number of shareholders have expressed their dissatisfaction with what it proposed and it is possible litigation may arise.”

It adds: “It such a situation arises it will be vigorously defended by the company and the board of directors are satisfied that no provision is required in thee financial statements. It is impractical to estimate the financial effect of any such legal actions.”

The accounts show that the company increased its pre-tax losses from €4.2 million in 2018 to €5.2 million in 2019, while the value of its intangible assets rose from €3.1 million to €5.2 million.

Edun and the high cost of sustainable fashion

The U2 singer Bono and his wife Ali Hewson established the sustainable fashion brand Edun in 2004 in an effort to bring about positive change through its trading relationship with Africa. Backed by LVMH until it handed back its shares in 2018 for no consideration, it was in many ways ahead of its time and championing an agenda that is very much in vogue now.

It has been gradually winding down, and new filings give an update on its financials. It made a loss of $378,000 in 2019, pushing retained losses to $87 million. The company owed shareholders some $64.4 million at the end of the year, during which it waived a $3.4 million payment from Edun Americas Inc. It now has one employee and during the year paid a termination payment of $41,000 to a staff member.

Losses mount but value increases at Bloomberg’s PolarLake

Bloomberg Data Management Services has also filed accounts. This company houses the business of PolarLake, the Irish technology company bought by Bloomberg eight years ago for around $25 million.

The business had revenues of $21 million in 2019, up from $13 million for the year before. Pre-tax losses fell dramatically from $33 million in 2018 to $19.1 million in 2019. The company closed the year with retained losses of $229 million although Blomberg has given a written commitment to continue funding the Dublin business.

The company employed 148 people at the end of 2019, up from 161 a year earlier. Staff costs, including wages and salaries, totalled $21.7 million.

According to the accounts, the company has deferred tax assets of $144 million as a result of losses, which can be offset against future profits. During the year, it revalued the business upwards by $52 million to $217 million.