The directors of sports retailer Lifestyle Sports expect the business to return to profit in the current year.
That is according to new accounts filed by Lifestyle Sports (Ireland) Ltd which show that the firm's pre-tax losses halved from €2.4m to €1.2m in the 12 months to September 28 last.
This followed revenues at the business dipping slightly from €104.99m to €104.18m.
However, in their report, the directors state that the business has recorded revenue growth since the end of last September.
The company operates the Lifestyle Sports business through 38 bricks and mortar stores and online stores through "lifestylesports.com"
In their report, the directors state that "the company's profitability continued with increased momentum post year end and for the quarter ended December 31, 2024, which includes the key Black Friday and Christmas trading period, the company reported a €1.2m or 23% increase in EBITDA (Earnings Before Interest Tax Depreciation and Amortisation)".
They state that "this increase in cash profitability was a function of not just continuing cost savings but a welcome return to top line growth with 'like for like' revenue growth of 4.5% and an increase in gross margin percent by 240bps for the quarter versus the same quarter in the prior year".
They further state they note that "this growth in revenue was broad based, across both the performance and the sports inspired fashion segments of the business, across the men's, women's and kid's businesses and with both the Bricks & Mortar and online channels reporting growth also".
The directors note that "this performance, in what remains a challenging and competitive market, was validation of the company's strategy based on premium omni channel retailing focussed on the stylised athlete, benefitting from exclusive access to some of the most popular sports inspired brands in Ireland".
"Based on this performance the company is expected to return to profitability in the year ended September 27 2025," they added.
Lifestyle Sports is owned by the Co Wexford-based Stafford Group.
Reflecting on the 2024 fiscal performance, the directors state that the results for the year "were encouraging, as despite effectively flat revenue year on year, the company reported a €2.34m or 50% increase in EBITDA from €4.66m in the year ended September 30, 2023 to €7m in the year ended September 28, 2024".
They state that the increased cash profitability contributed to a €1.53m reduction in operating losses to €408,000.
Exceptional costs of €624,372 relating to store closure costs and restructuring costs contributed to the pre-tax loss of €1.23m.
The directors state that they note that the recovery in cash profitability was largely attributable to cost savings arising from the completion of the first full year of operations of the company's new state of the art automated warehouse facility, and further savings across property and personnel costs.
Numbers employed reduced from 408 to 383 as staff costs declined from €13.5m to €13.45m.
The pre-tax loss of €1.23m takes account of non-cash depreciation costs of €7.41m.
In a post balance sheet event, the directors reveal that the company participated in the successful re-financing of the Stafford Group with Bank of Ireland, to put in place five year facilities maturing in November 2029.
They state that having successfully paid down almost €7m of bank debt over the preceding 12 months from a combination of asset disposals and tighter working capital management, the Stafford Group refinanced its total banking facilities of €22.7m through a combination of term loans amounting to €19.2m and overdraft facilities amounting to €3.5m.
They state that the refinancing extends the Stafford Group's multi-generational relationship with Bank of Ireland and ensures that the group and the company are appropriately capitalised to secure their long term strategic objectives.
Shareholder funds at Lifestyle Sports (Ireland) at the end of last September totalled €40.87m as cash funds declined from €11.2m to €8m.
Reporting by Gordon Deegan
