The Irish arm of food and home retailer Marks & Spencer paid a dividend of €100 million to its UK parent last year as underlying profit at the group soared 31 per cent despite significant headwinds continuing to have a “pervasive impact” on the company.
The latest accounts for Marks and Spencer (Ireland), which cover the 12 months ended April 1st, 2023, show operating profit before exceptional items grew by €5 million from €16.2 million to €21.2 million last year, which represents an increase of 31 per cent. Its revenue increased by almost €11 million to just under €363 million.
The accounts show exceptional credits in the year of €3.2 million related to the receipt of a dividend from Marks and Spencer Turkey Clothing Textile of €4 million, which was offset by an impairment charge of €800,000.
This compared with an exceptional credit in the previous year of €20.3 million related to a receipt of a dividend from the same group of €18.2 million and the write-back of €2.1 million and exceptional charges.
Overall, profit before tax was down to €20.6 million from €31.3 million the year before. Operating profit was €24.4 million compared to €36.3 million in the previous year.
The group said total sales grew by 3.1 per cent over the year, noting that Covid-19 restrictions prevented it from trading in its clothing and home units until May 2022. It said the year-on-year sales performance of its three business units reflected that.
Sales of clothing and home products in its stores grew by 9.5 per cent whereas online sales of clothing and home declined by 7.9 per cent. Food sales grew by 1 per cent.
Gross profit was €126.4 million, which represented an improvement of €9.3 million or 7.9 per cent on the previous year.
Operating expenses increased by €4.2 million, or 4.2 per cent. The retailer said this increase was mainly in occupancy costs as the price of energy rose by €1.7 million in the year.
“And we didn’t have the €2.8 million benefit from rates waivers that we had in the previous year,” it added.
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The directors said they were “pleased” with results for the year. “There was continued sales growth and a 31 per cent improvement in underlying profit,” they said.
“We are seeing the benefit of steps which we took to mitigate the impact of Brexit-related costs in our food business.
“In October 2022, we launched our partnership with Applegreen, one of Ireland’s leading roadside [service station] retailers. And by the end of the financial year, the best of M&S food was on offer at five of their locations.
“Despite facing significant headwinds, we are encouraged by the strong foundations established last year and excited about what we can achieve in the year ahead.”
However, the directors added that on an “overarching level”, there remains a complex set of external factors that “continue to have a pervasive impact across the business”.
These included the ongoing cost-of-living challenges, the continued consequences of war in Ukraine, and the legacy of Covid-19, they said.
“In addition, the associated economic uncertainties triggered by these combined events are a further risk dimension.”
The number of full-time people employed by the company over the period was 1,279, which was down from 1,325 a year earlier.
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