Ikea costs dent profits as online sales rise
Investment costs at the Irish operation of furniture giant Ikea last year contributed to pre-tax profits tumbling by 71.5pc to €2.53m.
Last year, customers here spent €3.58m a week - or €181.1m across the year - at Ikea's Ballymun store and at its 'click and collect' store at Carrickmines on Ikea products such as Lack tables, Expedit shelving units and Hemnes Day beds.
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The store's online shopping channel, which opened in November 2017, generated €17.3m in click-and-collect sales, or 9.5pc of total sales.
However, the cost of sales increasing by 15.7pc to €126.37m in the 12 months to the end of August was the main contributory factor to the sharp drop in profits.
The firm's costs included a €2.5m upgrade of the Ikea showroom at its Ballymun store.
The directors state that the 8.6pc increase in revenues last year was largely due to the launch of its ecommerce platform.
The directors state that the new ecommerce sales channel has been more successful than expected and continues to grow. This change in sales method has required additional investment by the company but the directors are confident this impact will improve as the business adjusts its costs."
Ikea Ireland last year paid out a dividend of €9m and paid out a separate dividend of €2.5m post end of year.
Numbers employed by Ikea Ireland last year continued to increase, from 674 to 720, and staff costs increased by 9pc from €19.79m to €21.5m.
According to the directors' report, they are satisfied with the results and anticipate that the level of activity and profitability in future years will be in line with expectations.
The profit takes account of non-cash depreciation costs of €3.8m. Operating lease costs totalled €797,731.