Frappuccinos and new food ranges help Starbucks to €525,000 profit
Frappuccinos and bacon butties came to the rescue for Starbucks last year as the Irish arm of the US chain frothed back into the black, posting a €525,000 pre-tax profit.
The performance for the division's financial year that ended last October, was a sharp turnaround from a €3.3m loss a year earlier, as consumers kept a tighter rein on their spending and the business was restructured.
New accounts just filed for Starbucks' Irish arm show that turnover at its company-owned 17 outlets here fell 5pc to €15.3m. Its cost of sales plummeted 21pc to just under €13m, helping it to post a €2.4m gross profit compared to a €280,259 gross loss the previous year. Its administrative expenses also fell, from €2.3m to €1.8m. The business also paid loyalty and licence fees of €989,000 last year.
The directors said the company had moved into profitability in spite of continuing challenges in the Irish economy.
"Customers responded to a number of innovations, new products and continuing investment in store refurbishments," they said. "Innovations included the relaunch of our popular frappuccino drinks and new breakfast and lunch ranges."
But the company, which employs about 220 people in Ireland, also received €10.9m in cash by selling shares in the Irish unit to its immediate Netherlands-based parent. During the previous financial year it received €3.6m by issuing shares to the Dutch company.
That cash, from share sales, has helped the Irish operation eliminate a deficit in shareholder funds that was on its books.
The company says it will continue expanding in Ireland using a "disciplined approach".
Starbucks closed a fifth of its stores in Ireland in 2010 -- a move that contributed to the losses it reported that year.