Retail group enters the red

Impairment charges and reorganisation costs last year pushed the Co Kerry based Garvey retail and hotel group into the red.

New figures show that the family-owned business sustained a pre-tax loss of €1m last year after recording a pre-tax profit of €504,871 in 2010.

The Garvey-owned group operates across Munster in Kerry, Limerick, Waterford and Cork, and the new filings show that the group recorded the loss after impairment charges of €2m and reorganisation costs totalling €417,663.

The figures filed by Commidare Holdings Ltd to the Companies Office show that the group’s revenues declined from €126m to €123.6m in the 12 months to the end of December last.

The filings show that the group’s operating profits last year declined by 68% €1.98m to €630,055.

The directors’ report state they “are pleased with the trading performance for the year”.

The directors state that “in recognition of the prevailing economic climate and the underlying performance of individual business segments, the directors, in arriving at the group operating profit, recognised impairment charges of €2m against the carrying value of certain intangible and tangible fixed assets”.

The directors state that “reorganisation costs of €417,663 were also incurred. Notwithstanding the difficult trading conditions, the directors anticipate improved results for 2012”.

The group operates SuperValu outlets in Castelisland, Cobh, Dungarvan, Dingle, Limerick, Listowel, Newcastlewest and Tralee; Centra outlets; a sports and leisure outlet and two hotels in Dingle, the Dingle Skellig hotel and the Dingle Benners Hotel.

The Garvey family has been in the retail business since 1935 and introduced the first self-service supermarket in Munster in 1966.

The loss last year also takes account of non-cash depreciation costs of €2.4m and amortisation costs of €1.6m.

Last year, the numbers employed by the group declined from 675 to 646 as staff costs fell from €15.2m to €14.5m.

The impairment charges consisted of a €1m writedown in property and a €1m writedown in goodwill. It follows an overall €2m writedown in 2010.

At the end of December last, the group had shareholder funds totalling €18.4m that includes €15.9m in accumulated profits. The group’s cash during the year reduced from €7.4m to €4.3m.

Emoluments to the group’s five directors last year decreased from €821,895 to €776,642.

The figures show that the amount owed in bank loans and overdraft last year reduced from €52.8m to €48.1m.

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