Pretax profits at TK Maxx operator increase to €5.54m

Pretax profits at the operator of clothing and homeware retailer TK Maxx last year increased more than 13-fold to €5.54 million.

Accounts filed by TJX Ireland UC show that profits increased by 1,282 per cent to €5.54 million as revenues rose by €52.94 million, or 36 per cent, from €146.87 million to €199.8 million in the 12 months to the end of January 29th last.

In a note with the accounts, its directors said last year the company’s operations continued to be significantly impacted by Covid-19, with the firm’s bricks and mortar stores shut for 29 per cent of last year compared with 46 per cent of 2020.

The firm operates the TK Maxx and Homesense brands, and last year increased the number of TK Maxx stores by one to 27 while the number of Homesense stores remained at two.

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Directors said the revenue increase was driven by fewer Covid-related temporary store closures last year compared with 2020.

The accounts said cash generated from operations increased by €26.16 million when compared with the prior year.

The majority of the firm’s employees received Government Covid-19 wage subsidies during closure periods last year and the accounts show that €5.03 million was received in subsidies last year and this compares with €7.57 million under that heading in 2020.

The US-headquarter business recorded operating profits of €5.77 million after the €5.03 million Covid-19 supports were taken into account.

Numbers employed by the group increased from 1,141 to 1,476.

On the impact of Brexit, the directors said all merchandise sold at its Irish stores is sourced from the parent company’s distribution centres in England.

They said that post-Brexit the company continues to pay import customs duties “and this has significantly increased the cost of doing business in the Republic of Ireland”.

In addition, regulatory and compliance requirements continue to affect the flow of goods into Irish stores.

The breakdown of revenues show that TK Maxx generated €191.15 million in revenues and €8.66 million was recorded at Homesense.

Staff costs at the business last year increased from €28.27 million to €30 million.

The profit last year takes account of non-cash depreciation costs of €3.3 million, while rent costs increased from €10.29 million to €11 million and “other lease costs” totalled €2 million.

At the end of January 29th last, the firm’s accumulated profits totalled €38.92 million. The firm’s cash funds last year increased from €43.87 million to €46.12 million.