HOME ENTERTAINMENT chain Xtra-vision lost more than €3 million in 2010, but expects to make a profit this year after restructuring the business in August.
Accounts due to be filed shortly will show that in the 56 weeks ended January 30th last, Xtra-vision had revenues of €115 million but its operations lost €3.1 million.
Revenues were down close to 3 per cent on the €118 million it made in 2009. Its 2010 losses were less than half the €7.4 million reported the previous year.
The company believes it is on track to make a profit this year after restructuring during a three-month examinership that ended in August.
The High Court appointed David Hughes of Ernst Young as examiner in May when high rents and the withdrawal of trade credit insurance left it unable to meet some of its liabilities.
The restructuring plan drawn up by Mr Hughes allowed it to exit 16 leases and close 20 loss-making stores.
In addition it was able to get rent reductions of up to 50 per cent on its remaining outlets and offer redundancy to some staff.
Parent company Birchall Investments made an extra €8 million available to Xtra-vision at the beginning of August. The chain has drawn down €2 million of this.
Birchall placed the remaining €6 million in deposit accounts charged to Xtra-vision and the company can withdraw the rest of the cash up to December 23rd of this year. It is understood that it may not need all of the balance.
Xtra-vision’s revenues come from DVD rentals, sale of electronics, mobile phones and other related goods through 184 stores.
It launched a mail delivery service for DVD rentals this year and plans to extend this by offering a digital service in 2012, subject to the Government enforcing legislation dealing with piracy and illegal downloading.
The industry believes more films are sold or downloaded illegally in the Republic than are bought or rented legitimately. The company wants the Government to enact a statutory instrument that it says will bring the law here into line with the EU.
This year its directors wrote to the Government warning that jobs and tax revenues will be lost if it does not tackle existing gaps in the Republic’s copyright laws.
The chain’s figures show that its balance sheet remains strong. Net assets were €17.5 million at the end of last year and the company had €3 million cash.
Stocks amounted to €18 million and it owed its creditors €16 million.
Xtra-vision’s accounts blame its declining revenues in 2010 on weakening consumer spending in the Republic and the fact that the 56-week accounting period includes January 2010 and 2011, typically the worst month of the year for its business.
Businessman Peter O’Grady Walshe and members of the Furlong family bought Xtra-vision from its US owner Blockbuster in 2009 for a reported €20 million.
Its ultimate parent company is Pageant Holdings which controls Birchall Investments.
