Pre-tax profits at the Irish arm of retailer, Harvey Norman almost doubled last year to €17.13m.
New figures show that the electrical and furniture retailer recorded the 75% jump in pre-tax profits as revenues increased by a more modest 2.3% from €411.12m to €420.72m in the 12 months to the end of June 2022.
The directors of Harvey Norman Holdings (Ireland) Ltd say the 15 stores in the Republic "performed strongly with market share gains across a number of key product categories".
The directors state that there were no Covid-19 closures in the year under review "and the business has performed better than expected in this financial year".
They state that sales showed a 78% increase compared to the pre-pandemic year of 2019.
The directors point out that "this shows that the brand has gone from strength to strength and has grown market share in all its categories".
The directors state the profits for last year "is the fifth straight year of profitability for the Irish business".
Numbers employed by the group last year increased by 45 rising from 1,372 to 1,417 as staff costs increased marginally from €55.32m to €55.86m.
Pay to directors decreased from €872,520 to €699,2023 made up of €685,203 in emoluments and €14,000 in pension contributions.
The company recorded post tax profits of €14.73m after incurring a corporation tax charge of €2.39m.
The group also operates two stores in Northern Ireland and has expanded since opening a 42,000 sq ft store in July 2022 at the Fonthill Retail Park close to the Liffey Valley Shopping Centre in Dublin.
The directors state that the store is the business's 16th store in the Republic and 6th store in Dublin.
The profit for last year takes account of non-cash depreciation costs of €4.49m.
The directors state that the 2022 financial results "have benefited from the easing of Covid-19 restrictions which has resulted in increased consumer confidence and in-store foot traffic".
They add that the increase in sales can be attributed to a full year’s uninterrupted contribution from the firm’s Galway and Sligo stores which opened in July 2020 and November 2020 respectively.
They say that sales also benefited from the re-opening of construction in May 2021 "propelling home renovations and upgrades in this financial year".
The directors point out, however, that "sales were more subdued in the second half of the year following the lifting of travel restrictions and the recommencement of travel outside Ireland".
The directors point out that "supply chain constraints became an issue due to significant increases in shipping costs, continuing lockdowns and major port congestion in parts of Asia".
They state that "this had an impact on furniture and bedding sales of imported goods during this period. Local suppliers were also hampered by the lack of imported components and a very tight labour market".
The accounts further say that "over inflated shipping costs which prevailed through FY2022 have now returned to acceptable levels which will see an improvement in margins particularly in our furniture business".
The directors add that the group’s stores, including the flagship store at Tallaght, have continued to benefit "from customers investing in their homes".
They claim that "increased sales and market share growth continued across a number of categories following significant growth in the previous financial year".
The directors state that the Harvey Norman brand remains strong across Ireland "and the group continues to invest in the development of the brands and in the expansion of the Irish business".
The directors reveal that along with the new 42,000 sq ft store at the Fonthill Retail Park, the group in June 2022 purchased a property investments here, Eastgate Retail Park at Eastgate, Little Island, Cork.
The report states that the Eastgate Retail Park comprises 175,000 sq ft and consists of eight units which are occupied by a number of retailers.
The accounts show that the business paid out €19m for investment retail properties during the year.
The directors state that the diversification of the business with the purchase of Eastgate Retail Park "and the additional rental income has increased the group’s income streams and strengthened the balance sheet".
At the end of June 2022, the group had shareholder funds of €53.68m. The group’s cash funds declined from €20.9m to €1.5m after paying out for the investment properties.
- reporting by Gordon Deegan
