THE IRISH ARM of Universal Music slipped into the red and saw its sales dive last year after a “major customer” ceased to trade.
New accounts for Universal Music Ireland show that turnover at the firm was just under €11 million in the 12 months to the end of 2016 compared to more than €13 million the year before.
However, cost of sales and administrative expenses stayed largely the same year-on-year.
This meant that while the firm made an operating profit of €1.6 million in 2015, in 2016 it made an operating loss of over €640,000.
Taking everything into account, Universal Music Ireland made a loss of just over half a million euro during the year, compared to a €1.5 million profit in 2015.
“Revenue decreased in 2016 compared to (the) prior year mainly as a result of a major customer ceasing to trade in the Republic of Ireland,” the directors’ reports said.
The fall in turnover was almost entirely attributable to a collapse in the company’s CD sales, which more than halved from €6.2 million to just over €3 million.
Although it did not name its customer that went out of business, Universal is likely referring to entertainment retail chain HMV, where many potential customers would have bought CDs.
HMV’s stores closed down in 2013 and the company went into receivership, however, after the company was bought out by Hilco Capital a number reopened.
These stores closed in 2016 as HMV went into liquidation.
However, there was some good news for Universal Music Ireland, as its income from royalties and licence fees rose from €6.7 million to €7.9 million.
The number of people employed by the company stayed largely static, rising marginally from 17 to 18. Staff costs dropped from €1.5 million to €1.3 million.
Pay for the firm’s two directors, Mark Crossingham and Nick Younger, fell from €544,499 to just under half a million euro.
The company also paid out a dividend of €1.2 million during the year to its owners.