Paddy Cosgrave’s Web Summit group returned to profitability last year, posting pre-tax profit of €4.34 million

Web Summit returned to profitability last year. Paddy Cosgrave’s company, which hosts its annual technology conference in Lisbon, reports according to Manders Terrace Ltd.

They show that the group has returned to profitability after revenue rose by 14.45 million euros, or 83 percent, from 17.35 million euros to 31.8 million euros last year.

Accounts, which became available on Wednesday, show business has recovered over the past year as Covid-19 restrictions were eased.

The group’s 2020 accounts, which only became available on Tuesday, show that the company suffered a €30.59 million drop in sales in 2020 due to the impact of Covid-19.

The group’s 2020 revenues fell by 64% from €47.94 million to €17.35 million and resulted in the company posting a pre-tax loss of €5.29 million in 2020.

The group’s 2020 revenue fell sharply after the Web Summit was unable to host its premier in-person Web Summit 2020 in Lisbon due to Covid-19.

It then ran a virtual version of the conference in December 2020, which attracted 104,000 people.

The main activity of the group is the development of software and the organization of events.

In 2021, directors said the company “continued to invest in developing our software and technology to enhance our physical events when we return in person.”

They explain: “Web Summit returned in 2021 stronger than expected, selling out with over 40,000 attendees, with numbers limited due to Covid-19 health and safety regulations.”

The 2020 pre-tax loss included a special provision of €1 million donated to ChangeX by Web Summit 2020.

A note accompanying the 2020 financial statements signed on October 31 describes ChangeX as an Irish-founded platform that brings people together to work on initiatives for the common good. The note reads: “ChangeX has identified and funded a number of projects aimed at strengthening Ireland’s response to Covid-19.”

Despite the impact of Covid-19 on operations in 2020 and 2021, the number of employees in the group continued to grow over the two years, rising from 225 in early 2020 to 246 at the end of last year.

Personnel expenses increased last year from €12.68 million to €13.43 million.

Directors’ salaries nearly quadrupled last year from €551,212 to €2.15 million, and the big increase follows the appointments of Nida Shah, Nathan Hubbard, Peter Gilmer and Michael Sexton to the board last year.

The group benefited from “other operating income” of €712,514 in 2020 and €1.13 million in 2021.

Statistics released separately by the Revenue Commissioners show that Manders Terrace subsidiary Web Summit Services Ltd has claimed payments from the government’s Covid-19 wage subsidy scheme in 2020 and 2021

The 2021 profit also includes combined non-cash depreciation and amortization costs of €1.7m.

The 2021 profit resulted in the group’s shareholder funds increasing from €7.77m to €11.5m. The group’s cash and cash equivalents increased from €11.65 million to €19.29 million.

The Web Summit conference was founded by Paddy Cosgrave, Daire Hickey and David Kelly in Dublin in 2009, with 150 attendees at the inaugural event. Mr Kelly stepped down as a director in April 2021. Mr. Hickey resigned as a director in August 2019.

A high-profile legal battle between Mr. Cosgrave — who owns 81 percent of the company — and his former colleagues, Mr. Hickey and Mr. Kelly, remains to be decided in multiple court cases.

The 2021 financial statements signed on June 7th state under the heading “Legal Fees” that “from time to time the Group is involved in claims and legal proceedings arising out of the ordinary course of business and/or otherwise”.

The statement states: “Based on the information and legal advice currently available, the Directors believe that any such litigation, individually or collectively, will not have a material adverse effect on the financial statements and that the Group is reasonably positioned to contend with the outcome avoid any such litigation.”

Web Summit was relocated to Lisbon in 2016 as part of a 10-year deal with the Portuguese government.