Two of Dell's Irish subsidiaries reported increases in turnover and profitability in the year to the end of January 2002, despite the onset of a difficult economic climate for technology firms, writes Jamie Smyth in New York

Financial accounts filed recently by the US computer group show Dell Computer Limited and Dell Direct, which are both registered in the Republic and serve the Europe, Middle East and Africa region, posted revenue growth of 35 per cent and 40 per cent respectively.

Dell Direct is the Bray and Cherrywood-based services division, which provides data processing services and telemarketing services to British, Irish and some European customers.

The results show it generated turnover of €147.9 million to the end of January 2002, up from €105.6 million in the previous year.

Pre-tax profit for the financial year increased to €9.9 million, up from €8.9 million. The small increase in profit reflected a major hike in operating expenses, which increased to €129 million in the year to January 2002, up from €86.8 million in the previous year

Staffing costs actually fell during the year to €40.8 million, from €43 million, despite the fact that Dell increased employee numbers from 950 in 2001 to 1,076 in 2002.

The results note that Dell Direct has a commission agreement with another Dell group company, Dell Products, which reimburses all costs incurred in providing the services to customers. The company also receives a commission from Dell products based on the percentage of the sales value of the orders processed under the agreement.

Dell Computer Limited, the Limerick division that repairs computer equipment, generated turnover of €133.9 million in the year to the end of January 2002, up from 98.8 million in the previous 12 months. Pre-tax profit increased to €3.9 million, up from €2.9 million.

The financial performance of Dell Direct and Dell Computer Limited reflects the general trend in Europe, which has seen Dell maintain profitability and gain market share over rivals despite the sharp dip in IT spending over the past few years.

Dell is one of the Republic's largest employers. It has more than 1,000 staff based at its Bray and Cherrywood sites, which provide sales and support to the Republic and Britain. It also employs a further 3,400 full-time staff at its European manufacturing hub in Raheen, Limerick.

The company estimates that it contributes to at least 5.5 per cent of Irish exports.

A full breakdown of Dell's operating performance in the Republic is difficult to obtain because it only files results for certain subsidiaries.