Expansion costs hit profits as Ikea furnishes figures
Expansion costs at Ikea's Irish business last year contributed to the firm's pre-tax profits falling by 25pc to €8.9m.
New figures also show that the Irish arm of the Swedish furniture giant saw revenues increasing from €152m to €166.7m in the 12 months to the end of August last.
The figures show that the public splurged over €3.2m a week on Ikea products here such as Lack tables, Expedit shelving units and Hemnes Day beds. The company here is headed by markets manager Claudia Marshall.
The company last year paid a dividend of €10m, following a €11m dividend payout in 2016.
The retailer operates its main Irish store at Ballymun but it also opened a new base at Carrickmines during the year under review where customers can collect furniture after ordering items online.
The directors' report refers to the firm's expansion plans here. Earlier this month, it was reported that the retailer is in advanced talks to purchase lands for a new store in south Dublin.
The directors said sales increased by 10pc both in its Ballymun store as well as at the new order and collection point which opened at the start of the financial year.
The directors said that gross margin remained consistent with a slight increase from 34pc to 35pc.
Operating profit decreased from €13m to €9.99m due to the increased investment in its staff and by becoming a Living Wage player along with increased costs associated with the new order and collection point.
The accounts show that numbers employed by Ikea Ireland increased from 567 to 674. The increase in headcount combined with the payment of the Living Wage resulted in staff costs increasing from €17.2m to €19.79m. The directors' report said they are satisfied with the results of the company for the year.
They remain confident that expansion plans, investment in commerce, enhanced services offer and commitment to quality and price will strengthen its market position.
Accumulated profits at the end of August last stood at €26.47m. Shareholder funds totalled €31.47m. The company's cash pile reduced from €4.27m to €1.34m during the year.
The profit takes account of non-cash depreciation costs of €3.88m and operating lease costs of €797,731.
Directors' remuneration fell from €353,323 to €307,680.