Fashion group's Irish profits hit €18m

British retailer Philip Green is making annual pretax profits of more than €18 million at the 90 stores in the Irish unit of his Arcadia fashion empire, part of Europe's largest retail group.

But new accounts also reveal that the business was static in the most recent financial year, with both sales and profits at a virtual standstill. The directors said in their report that trading was satisfactory during the year and was expected to remain so for the foreseeable future.

Famous for his unsuccessful attempt last year to buyout Marks & Spencer for €13.15 billion, he has stores throughout the Republic under seven brand names: Burton, Wallis, Evans, Dorothy Perkins, Miss Selfridge, Topman and Topshop.

With each of these brands aimed at different strands of the fashion market for women and men, Mr Green is planning a renewed assault on the Dublin fashion market with a major new outlet at 7 St Stephen's Green, which was occupied until last week by the furniture and home interiors retailer Habitat. His company, Arcadia Group Multiples (Ireland) Ltd, paid a premium of €3 million to buy out the Habitat lease, by far the highest key money ever offered for a retail premises in Ireland.

After agreeing to pay annual rents of more than €1.5 million on the three trading floors of 2,145 sq m in the building, the retailer is expected to mount a aggressive push for business in the site. Accounts just filed for Arcadia's Irish operation, which are denominated in sterling, show that its pretax profits of £12.63 million (€18.26 million) in the year to August 28th, 2004, were marginally behind its pretax profit of £12.78 million the previous year.

Sales net of value added tax of £52.21 million were slightly ahead of sales in the previous year, which were valued at £52.19 million. These figures do not include the operations of 88 Arcadia stores in Northern Ireland.

Mr Green's British-based holding company Taveta Investments Ltd took no dividend from the Irish operation, whose profit and loss account stood at £44.55 million at the end of the financial year, up from £31.92 million a year earlier.

In a note to the financial statements, the company said that a change to its accounting policy meant that sales of £2.74 million from concession outlets in its stores and from "certain other sources of revenue" were not recognised in the most recent returns.

This followed the application of an amendment to FRS 5, a financial reporting standard. In light of the same amendment, sales of £2.83 million were not included in the financial statement for the previous year.

The company employed an average of 735 people during the year, down from 801 the previous year.

The latest pretax profits were recorded after paying wages and salaries of £6.19 million. It paid corporation tax of £2,000 after a £1.69 million adjustment in respect of previous years. The value of its stocks at the end of the financial year was £2.34 million, up from £1.65 million in the previous period.