Expansion costs cut Avoca profits
EXPANSION costs at family-owned retailer Avoca last year contributed to pre-tax profits declining at the group by 28pc to €1.197m.
New figures show that Avoca Handweavers Ltd and subsidiaries sustained the drop in pre-tax profits in spite of revenues increasing by 2.2pc from €48.6m to €49.7m in the 12 months to the end of January 31 last year.
Avoca designs and manufactures its own clothing, food and home furnishings at its Wicklow base and it has 10 retail stores and cafes in the island of Ireland. It employs 750 staff.
Managing director Simon Pratt said yesterday: "We were disappointed with the performance to January 2012 but it was a year when we put into place some new structures to allow for future growth.
"One of the factors in the reduced profits for 2011 was investing in areas of expansion that was already paying dividends in 2012.
"In the past two years we have opened a standalone central bakery, launched a new food-only model at Monkstown and opened a 20,000 sq ft store in Malahide, creating 170 new jobs in the process."
Mr Pratt said that Avoca enjoyed its busiest Christmas retail business since 2007 with like for like sales on 2011 up 5pc. He said: "There appears finally to be more positive sentiment.
"Including new business, our year to date is up over 15pc for our retail and café business."
The figures show that the profits were boosted by a €371,359 profit from the sale of land. They also show that operating profits at the group last year declined by 25pc from €2.48m to €1.61m.
However, interest payments arising from the group's expansion, totalling €793,591, helped reduce profits.
No dividend was paid last year.