Arnotts interim pre-tax profits up 20% on 2001

Retailing group Arnotts has posted pre-tax profits of €6.7 million for the first half of this year, up 20 per cent on the same period in 2001.

Turnover increased by 7.6 per cent to reach €90.6 million, as buoyant activity in both the group's own retailing operations and in concessions boosted trading.

Arnotts managing director, Mr Seamus Duignan, said yesterday that the bulk of the retailing revenue came from the company's Henry Street store, which now covers 300,000 sq ft.

Within this, Mr Duignan said that concessions were "by and large" performing at about the same level as the company's own retailing operations. He cited the recent World Cup Finals and the company's sponsorship of the Dublin Gaelic football team as significant contributors to growth.

Mr Duignan said the group's associate company, security firm Brink's-Allied, had contributed €500,000 more to profits in the period under review than in the previous year.

He attributed this to heightened activity surrounding the euro changeover.

He added, however, that the contribution had been almost entirely cancelled out by a loss at the North Earl Street store, Boyers.

The group is currently engaged in a €3.5 million renovation at the store which is expected to be completed over the autumn months.

Looking forward, Mr Duignan said he was confident of the company putting in a strong full-year performance, despite the potential threat of economic uncertainty. He said the company's reduced cost base had left it in a competitive position should a downturn take hold.

The company is to pay an interim dividend of 10.75 cents on October 18th, an increase of 16.2 per cent on last year.

In his statement on the results, Arnotts chairman Mr Michael O'Connor said the group was actively examining development opportunities for the group "with the objective of further enhancing shareholder value".

Chief among these, according to Mr Duignan, is the opening of a new store, although share buybacks may also be considered.

The store in question would be about 100,000 sq ft in size, with three-quarters of that dedicated to retail space.

Mr Duignan said the company was currently considering possible opportunities in Cherrywood and Liffey Valley in Dublin and in Cork and Belfast.

"Our favoured option is still to open another store on the perimeter of Dublin," he said.

Merrion Stockbrokers analyst Mr Peter Frawley yesterday described the Arnotts results as "solid", noting that they had come in ahead of expectations.

Merrion has retained a hold recommendation on Arnotts however, having downgraded the stock earlier this month. The broker believes that companies with more visible growth profiles are currently available on lower ratings.

Arnotts shares closed at €10.60 last night, down 10 cents on the day.