The Irish arm of retailer, Marks & Spencer last year paid out a €100m dividend as the business's underlying profits increased by 31%.
New accounts show that pre-tax profits at Marks & Spencer (Ireland) Ltd decreased by 34% to €20.6m in the 12 months to the end of April 1st last mainly due to dividend income decreasing sharply.
The drop in profits came as revenues increased by €10.92m from €352.03m to €362.96m.
The directors state that total sales increased by 3.1% during the year.
They state: "Covid 19 restrictions prevented us trading 'clothing and home' in our stores until May 2022 and the year on year sales performance in our three business units reflect that".
They state that "sales of 'clothing and home' in store grew by 9.5% whereas online sales of clothing and home declined by 7.9%. Food sales grew by 1%."
The directors state that gross profit increased by €9.3m or 7.9% to €126.4m and confirmed that cost restructuring in the M&S business helped grow its business’s gross profit margin from 33.3% to 34.8%.
The chief reason for the decline in pre-tax profits was exceptional gains of €3.2m last year compared to €20.27m under that heading in the prior year.
The exceptional gain was made up of a €4m dividend from Marks and Spencer Turkey Clothing Textile LLC, offset by an impairment charge of €800,0000 and the dividend was down sharply on the €18.2m dividend from Turnkey Clothing Textile LLC in the prior year.
The directors state that operating expenses increased by €4.2m or 4.2% on the prior year.
They state that "this increase was mainly in occupancy costs as energy costs increased by €1.7m in the year and we didn’t have the €2.8m benefit from the rates waivers that we had in the previous year."
The retailer recorded operating profits of €24.4m and finance costs of €3.79m reduced profits to a pre-tax profit of €20.6m.
The directors state that they "are pleased with the results for the year". They state that "there was continued sales growth and a 31% increase in underlying profit".
They state : "We are seeing the benefit of steps which we took to mitigate the impact of Brexit related costs in our food business. In October, we launched our partnership with Applegreen."
They state that by the end of the year, "the best of M&S Food was on offer at five of their locations".
The directors state that delivering performance and driving change is everyone’s responsibility at M&S and employees "have done a remarkable job".
The directors state that "despite facing significant headwinds, we are encouraged by the strong foundations established last year and excited about we can achieve in the year ahead."
A breakdown of M&S Ireland revenues show that 'clothing and home' revenues totalled €160.86m with food revenues increasing marginally from €148.08m to €149.52m.
Online sales declined by 8% from €57.05m to €52.56m.
Numbers employed by the retailer last year declined by 46 from 1,325 to 1,279 as staff costs increased slightly from €56.44m to €56.66m.
The profits for last year take account of non-cash depreciation costs of €10m. Pay to directors totalled €540,000 made up of €496,000 in emoluments and €44,000 in pension contributions.
The €100m dividend payout off-set by post tax profits of €17.95m resulted in accumulated profits reducing from €153m to €71m.
Shareholder funds at the end of April 1st last year totalled €175.3m. Cash funds increased from €4.66m to €7.96m.
Reporting by Gordon Deegan
