Arnotts shows 20% jump in profits

ARNOTTS, the department stores group, has recorded a 20 per cent rise in pre tax profits, £4.5 million to £5.4 million in the year ended January 1996.

All stores, including Boyers of North Earl Street, Dublin, contributed to the good results. And Brink's Allied, the security firm in which it has a 50 per cent stake, returned to profit.

The group had been trying to sell its stake in Brink's for some time. However, "we are not as eager to sell now that it is making profits", said Arnotts' managing director, Mr Seamus Duignan. Its share of profits from the security company amounted to £88,000 last year. This compared with a loss of £300,000 in the previous year.

However, Arnotts would sell "at the right price". Brink's year end was December 31st and its profits have risen in the first quarter, he said.

While Arnotts recorded strong profit growth last year, there was a contraction in growth in the second six months due to the delay in the redevelopment of the Liffey Street and Abbey Street properties. Profits rose by 35 per cent in the first half but this fell to 15 per cent in the second half, which accounts for two thirds of group profits.

The planning approvals received from Dublin Corporation were appealed by An Taisce, the Lighthouse Cinema, Independent Newspapers and Telecom Eireann. Arnotts expected to receive a decision in the very near future". While not rejudging the outcome, Mr Duignan said he did not expect any escalation in the building price of the development.

The development was planned for three separate phases, and it is likely now hat phase one (Liffey Street) and phase two (Adelphi in Abbey Street) will be developed concurrently. Asked what would happen if the planning was turned down, he said "we are not thinking in those terms" but the group would have to look at the feasibility of the project.

Group turnover, excluding franchise sales, increased by 8 per cent to £50.67 million while franchise sales went up by 6.6 per cent. Despite the slowdown in the second half, the Henry street store enjoyed growth.

The Grafton Street store made a "significant" contribution but profits and turnover were similar to the previous year. Boyers traded strongly and improved profits "substantially".

Earnings per share increased from 14.4p to 20.7p. Apart from good underlying growth, earnings were also helped by a reduction in the tax charge from 44 per cent to 33 per cent. This rate is expected to continue to fall over the next few years. A final dividend of 6.25p net per share has been declared, making a total dividend of 9.5p, or 1p higher than the previous year.

Arnotts is looking for further growth this year. Trading is described as "satisfactory" for the first two months.