Creative Labs accounts show drop in gross profits

Mark Hilliard

Gross profits at the digital entertainment and sound specialists Creative Labs Ireland fell from $11.9 million (€8.9 million) to $9.5 million (€7.1 million) according to its most recent accounts.

The company has warned ongoing “significant” challenges in the hardware technology sector could impact on future revenue projections.

Located in Blanchardstown, Dublin it employs 26 people with annual salary costs to the year ending June, 2013 of €1.2 million, down marginally on the previous year, and other pension costs of about €80,000.

Turnover, arising from the sale of digital sound boards, multimedia and personal digital entertainment products in Europe, was €35.4 million by June last year, down from €47.6 million.

However, while gross profits and turnover fell, the company recorded a net profit of €346,000 as compared to a loss of €1.4 million in the previous year.

“The company foresees that significant challenges continue to exist in the micro and macroeconomic environment of Europe and increased competition in the hardware technology industry that would result in a lower year to year revenue projection,” it warned in its accounts.

“The company will continue to review and refine its operations to achieve greater operation efficiency so as to lessen the impact of the lower revenue stream of the company’s results.”

Creative Labs (Ireland) is a member of the larger Creative Group which, it says, has implemented a broad financial risk management policy.

Other key risks identified are the effect of pricing and marketing on the part of its competitors in the multimedia and personal entertainment business.