Hickey's pharmacy group warns of 'excessive' rent levels
ONE of the country's largest pharmacy retail groups has warned that excessive rents are threatening business.
The directors of the family-owned Hickey's chain make their comments in accounts filed by holding group Drishlawn. The accounts also show that operating profits slipped 1pc last year to €7.43m. Sales in the year ending last February fell by a similar amount to €46.31m.
The group sustained a minor drop in pre-tax profits to €1.12m after non-cash amortisation costs of €3.2m, interest payments of €1.1m and a write-off of a loan totalling €1.98m were taken into account.
The directors warn that several of the group's leases "are upward only in nature and are currently at excessive and unviable rent levels".
"These excessive rents represent a threat to the business as it is currently structured. The company is engaging with landlords and with its advisers to achieve the necessary restructuring of excessive lease costs, and it is optimistic that this will be successful," they add.
Hickey's is cutting costs and looking at possible expansion outside the core business to make up for repeated reductions in payments by the HSE and price reductions among pharmaceutical manufacturers.
It operates 30 pharmacies, 17 of which are in Dublin. Employees increased from 294 to 298, including nine people in management and three in administration. Staff costs last year increased from €7.329m to €7.677m.
The directors are listed as Patrick Hickey, John Lanigan and Stephen Butler with aggregate directors' renumeration last year increasing by 25pc from €348,252 to €436,455, made up of salaries of €411,038 and pension costs of €25,417.
The profit recorded last year also takes account of non-cash depreciation costs of €351,560. The group's bank loans fell from €27.6m to €24.8m. The figures show the group's shareholder funds stood at €9.8m, including a shareholders' deficit of €1.59m and called-up share capital of €11.42m. Cash increased from €2.23m to €6.1m.