Pretax profits drop at Harvey Norman’s Irish arm

Pretax profits at the Irish arm of consumer electronic and furniture retailer Harvey Norman declined by 23 per cent to €13.1 million last year. Accounts filed show that Harvey Norman Holdings (Ireland) Ltd recorded the €4 million drop in pretax profits as revenues increased by 0.8 per cent from €420.72 million to €424.07 million in the 12 months to the end of June 2023.
Highlighting the main reason behind the drop in profits, a note with the accounts said the operating expenses for 2023 were inclusive of company brand licensing fees payable under a revised global transfer policy adopted this year. The note said that the profitability of the Irish group was reduced by €2.59 million due to fees payable under this policy.
The accounts also noted that the increase in revenues was mainly due to the contribution of a 42,000sq ft store in Fonthill, Dublin, the firm’s 16th in the Republic, which opened in July 2022.
The accounts also said there had been “significant” growth when compared to pre-pandemic sales in 2019 of €236 million. “The brand has gone from strength to strength, and has significantly grown market share in all categories”.
The accounts also said that the 2023 financial year was “the six straight year of profitability”, and that the 16 stores in the Republic “performed strongly with market share gains across a number of key categories”.
The opening of the Fonthill store and the company’s new distribution centre showed that “the company continues to see opportunities in the Irish market which will grow sales and profitability in the future”, the account said.
Numbers employed by the group last year increased by 21 from 1,417 to 1,438 as staff costs increased marginally from €55.86 million to €56.5 million. Pay to directors decreased from €699,203 to €687,549 made up of €670,923 in emoluments and €16.626 in pension contributions.
The profits last year take account of non-cash depreciation charges of €5.4 million and operating lease rentals of €16.32 million.
The group’s operating profits declined by 11 per cent from €17.48 million to €15.6 million and interest charges of €2.49 million resulted in the pretax profit of €13.1 million. The company recorded post-tax profits of €10.57 million after incurring a corporation tax charge of €2.54 million.
The group also operates two stores in Northern Ireland, and the revenues for 2023 comprise the Republic of Ireland and Northern Ireland.
At the end of June 2023, the group had shareholder funds of €63.7 million. The group’s cash funds increased from €1.5 million to €8.43 million.