Profits at Irish arm of Argos plunge to €20.4m
PRE-TAX profits at the Irish arm of catalogue retailer Argos declined by 11pc to €20.4m last year, according to accounts recently filed with the Companies Office.
Accounts just filed by Argos Distributors (Ireland) show that the company sustained the 11pc drop in profit after sales climbed 4pc to €213.8m in the 12 months to the end of February.
"Sales were up 4pc on the previous year, dispute the current retail downturn in the Irish economy," the company's report says. "The increase in sales, however, has been to the detriment of gross profit which has fallen to €74.1m during the year."
While the fall may be disappointing, it is nothing compared to the 94pc plunge in profits posted by the catalogue retailer's operations in the UK and Ireland in the first six months of the company's present financial year as the austerity drive in Britain continues to chip away at the spending power of low-income families.
The Irish report adds that operating costs fell as a result of cost cutting throughout the year.
The directors state that the impact of these moves has led to an operating profit of €13.5m -- almost half the operating profit of €25.9m in 2009. The chief factor behind the drop in operating profit was a fall in gross profit from €86.7m to €74m.
The company benefited from €7m in finance income last year compared with finance expenses totalling €2.75m in 2009. This led to the smaller drop in pre-tax profits from €23.2m to €20.4m. The pre-tax profit takes account of €2.96m in non-cash depreciation costs.
The directors' report states that the company "made further operational improvements by increasing the product range available at each individual store and improving the systems, processes and layouts to enhance customer choice, service and convenience".
At the end of February last, the company had accumulated profits totalling €149m. Its total equity amounted to €375.2m, including €207m in cash.
The figures show that the numbers employed by the company last year grew by 69 from 1,274 to 1,343, with staff costs declining from €22.1m to €21.4m
The accounts also show that the company's cost of sales increased by €21.3m from €118m to €139.8m, while its net operating expenses decreased marginally from €60.7m to €60.5m.
The directors did not recommend the payment of a dividend last year.
Part of the Home Retail group, Argos has 700 stores across the UK and Ireland, employing 33,000.