25 jobs across county Tipperary are under threat following the announcement that the directors of Celtic Bookmakers have appointed a receiver to their business.
Seven shops in the countrywide chain are located in Tipperary, four in South Tipperary. In total 25 people are employed at the offices.
The shock announcement that Celtic Bookmakers, owned by former minister Ivan Yates and his wife Deirdre, was to be placed in receivership was made yesterday, Tuesday. In a statement the directors said the shops will close in the coming days and they hope to sell as many of them as possible as a going concern.
Celtic Bookmakers have branches in Carrick on Suir, Cahir, Cashel and Clonmel, with four people employed in each shop. There are three people employed at each branch in Thurles, Roscrea and Borrisokane.
"We have invited AIB to appoint a receiver to Celtic Bookmakers Limited. As of today, AIB has appointed Mr Neil Hughes of Hughes Blake Accountants to act as receiver on its behalf. It is intended that he will seek to market and sell as many of the shops as a going concern as possible. Other shops will close in the coming days, but the receiver will be making every effort to assign those leases where possible," the Yates said in their statement on Tuesday.
"We can confirm that all bets will be honoured and paid to customers of Celtic Bookmakers, and that there is adequate working capital available for the period of the receivership to ensure this.
"While there will be inevitable significant job losses, we are endeavouring with the receiver, to try and retain as many of the 237 jobs as possible throughout the 47 betting shops in Ireland. In the case of redundancies, we have an undertaking from the receiver which ensures that affected staff members will get their full statutory entitlement," the statement continues.
Revenue at Celtic Bookmakers has fallen by an unsustainable 50% since mid-2007, having previously achieved an annual income of €180 million and an operating profit of €4 million. Since then, it has reduced its cost base from €17 million to less than €12 million, including the closure of twelve loss-making shops. Trading conditions in 2010 continued to deteriorate and have prevented the company from securing a suitable merger, refinancing or restructuring despite many months of management effort in this regard.
"The general decline of disposable income and the surrender cost of leasehold interests meant that the company expected that it would not be able to meet payments as they fall due in the future. Given its significant bank debt (circa €6 million), together with rents owing to landlords for "top of the market" rents on shops throughout the country, the directors have concluded that the company is insolvent as its liabilities exceed its assets. The directors sought this receivership in advance of the situation deteriorating further," their statement explained.
Celtic Bookmakers' two betting shops in South Wales are not impacted by the receivership. However, these shops are now on the market.
"Today is a profoundly sad day for our employees, for our families and for ourselves," said Ivan Yates. "Like many, we did not anticipate the rapid decline in the economy, but I acknowledge that the accelerated growth of the business placed the company in a difficult position given the extent of the recession."
The directors have supported the company from their personal resources and have outstanding unpaid loans with the company. But due to personal guarantees with the banks, the directors expect to face further significant financial challenges beyond the lifetime of the company.