Furniture retailer sees pre-tax loss of €3.8m as revenues fall

FURNITURE retailer chain, Curleys recorded a pre-tax loss of €3.8 million in 2009 after revenues decreased by 17% to €13.4m.

The retailer operates outlets in Galway, Kilkenny and Ennis after shutting down clearance stores in Sligo and Craughwell in summer 2010 due to the decline in the market.

Accounts recently filed with the Companies Office how that Curley Furniture and Carpets Ltd recorded the €3.8m loss to the end of March 2009 after recording a pre-tax profit of €179,861 in 2008. The company’s revenues declined during the year from €16.3m to €13.4m.

At the end of March 2009, the company had net liabilities of €3.68m.

This sharp deterioration in the company’s finances prompted the firm’s auditors, KPMG to state that the company’s ability to continue as a going concern is dependent on the availability of continued support from the company’s bankers.

The auditors state: “The directors have reviewed the financial projections and underlying assumptions and considered the availability of financial support and, on the basis of this review and discussions with its bankers, believe that appropriate funding will be made available to the company to enable it to continue as a going concern.”

The directors state that “although, the above factors represent material uncertainties, the directors believe that the company will have sufficient finance so as to allow the company to meet its obligations and continue in operational existence for a period of at least 12 months from the date of approval of these financial statements”.

Accordingly, the directors of the company consider it appropriate to prepare the financial statements on a going concern basis.

The figures show that the company had accumulated losses of €3.68m at the end of March 2009.

The figures illustrate that the numbers employed by the company increased from 82 to 92 during 2009 with staff costs increasing accordingly, from €2.2m to €2.6m.

On the branch closures in Summer 2010, the directors explain that the “opening of the M6 motorway had a detrimental effect on the Craughwell store and with the prevailing market conditions, it was decided that the prudent option was to close both of these (Sligo and Craughwell) outlets”.

The directors state that the company intends to continue to trade from its remaining stores having regard to future conditions and competition in the area.

They also point out that the company has significant third party debt and continually monitors its interest rate risk on its external borrowings and seeks to reduce debt levels.

The figures indicate that the company’s administrative expenses included rent of €559,784 paid to John and Annette Curley and €279,129 paid to Curley Furniture — a company owned by John and Annette Curley for properties leased by the company.

The figures show that the company’s loans and overdrafts increased to €5.7m during the year.

When contacted, John Curley stated that he had “no comment” to make on the company’s accounts.