TCH: 'Perfect storm' accounts for €2.95m in losses

Thomas Crosbie Holdings Limited (TCH) has reported operating losses before interest and taxation of €2.95m for the 53 weeks to January 3, 2010. This compares to losses of €76,000 in 2008.

Its share of losses in associated companies was €1.7m whereas it showed a profit of €60,000 two years ago.

However, the group expects to return to profits in 2011.

In addition, the cost of fundamental reorganisation for the company in 2009 was €32.2m, €2.3m in 2008, including a brand impairment charge in 2009 of €30.1m. The brand impairment charge is a non-cash accounting adjustment arising from writing down the value of brands acquired since 1995 and is consistent with the impairment charges experienced by all other major media companies operating in Ireland today.

Staff numbers employed in the group fell from 802 to 711.

Group turnover in 2009 was €82.5m, €106m in 2008, directors remuneration was €1m, €1.3m in 2008, and dividends paid to shareholders were €1.12m, €3.83m in 2008.

TCH interim chief executive Tom Murphy said 2009 has been a very difficult year for the media industry in Ireland as it has been for virtually all sectors in the Irish economy.

Mr Murphy said: “Newspaper advertising revenues across all sectors and titles have experienced declines fundamentally as a result of the stagnation and decline of economic activity in Ireland. TCH has continued to fund and implement its cost reduction programmes and this activity, which continues in 2010, is yielding significant savings.

“TCH expects to be loss making in 2010 but on completion of its cost reduction programs expects that the savings achieved on headcount reduction, pay and other operating cost reductions and the disposal of loss-making activities including disengagement from unprofitable minority investments, when combined with revenue generating initiatives, will return it to profitability in 2011.

“These operating losses and the investment in cost reduction programmes are being funded out of TCH’s own cash reserves”, he said.

TCH Chairman, Alan Crosbie said the media landscape in 2009 can viewed as the perfect storm.

Mr Crosbie said: “Ireland is experiencing increased unemployment, reduced earnings for those lucky enough to be in employment and increasing personal savings, all of which result in falls in consumer spending in Ireland. When combined with the effects of global recession the result is the perfect storm.

“In this environment, media which is an early indicator of the overall health of the economy, has to restructure its cost base to the levels of business available to it and prepare its products and people for the upturn that is around the corner. In TCH we are lucky to have the commitment and support of very hardworking people at all levels in our group that are up for these challenges.”