McCauley Pharmacy group was on course to generate earnings of €4m last year and target significant growth this year after a restructuring of the business where 100 staff lost their jobs.
In a statement accompanying new accounts for the McCauley Pharmacy business, James Tolan said that Covid-19 had "a very significant impact on the demand for some of the services we provided such as beauty salons, and also impacted on demand for certain non-pharmaceutical products".
"As a result of this reduced demand, we had no option but to restructure our business which regrettably resulted in over 100 of our colleagues leaving McCauley."
Mr Tolan added: "We will see the financial benefit of the restructuring over the next two years. In 2021 we expect to generate EBIDTA (Earnings Before Interest Depreciation Taxation and Amortisation) of over €4m and we are targeting significant growth in 2022."
"We also expect to further grow the group through bolt-on acquisitions."
The report by the chairman of LXV Remedies Holdings Ltd is attached to new accounts which show that McCauley Pharmacy recorded pre-tax losses of €3.1m in the 12 months to the end of September 2020.
This followed revenues decreasing by 8% from €90.37m to €83m for the year.
Mr Tolan said that the cost of the 2020 restructuring which amounted to €2m is reflected in the loss of €3.1m for 2020.
He said: "Most of these losses are non-cash losses as they include goodwill amortisation of €2.7 million."
The loss also takes account of non-cash depreciation costs of €2.15m and interest payments of €1.17m compared to interest payments of €5.89m in 2019.
On the business's response to the Covid-19 pandemic impact, Mr Tolan said shareholders invested €3m of new capital and also waived their interest on shareholders loans.
"Our banking partners, AIB, agreed to a new banking facility. Consequently, we face the future with great confidence," he said.
In 2017, Carlyle Cardinal Ireland (CCI) acquired a majority stake in the Sam McCauley business.
"McCauley and the broader pharmacy retail sector play a very important role in the delivering of medicines and high-quality trusted advice to Irish Society," Mr Tolan said.
"At the moment the State does not appear to recognise the importance of the pharmacy sector and has a very narrow non-strategic transactional approach to the relationship."
In a directors' report accompanying the accounts, it states that "in the circumstances of the COVID-19 pandemic on the global economy and Ireland’s in particular, the directors were satisfied with the performance of the business during the year ended 30 September 2020 and that consequent to the necessary actions having been taken and stakeholder supports received we are well positioned to cope with the ongoing macro-economic challenges".
Numbers employed reduced from 596 to 505 and staff costs declined from €20m to €18.8m.
The staff costs included redundancy costs of €1.96m.
Directors’ pay reduced from €345,214 to €313,657.
The group’s operating lease costs for the year totaled €4.5m.
