Profits at Arnotts in the year to end January 2005 were in line with the previous year against a background of static turnover, the acting chief executive and finance director said yesterday.
Peter Madden said the pretax loss for holding company Arnotts Holdings, of €4.6 million, included two exceptional items totalling €2.5 million and a €6.5 million write-off linked to the company's in surplus pension fund.
When these two items were taken out, then the accounts indicated a pretax profit of €4.4 million. A dividend of €3.1 million was proposed. Turnover for the group was €153.3 million.
"The retail business is doing well," said chairman and shareholder Richard Nesbitt SC.
"We were able to pay the banks and pay a dividend. The good thing is that we are making money."
The business was taken private by its new owners in June 2003 for €255 million and new management is now in place. The group has since acquired a large portfolio of property in the Henry Street, Dublin area and a major planning application is to be made in the new year.
"We plan to develop the sort of world-class retailing that you would expect for the centre of a capital city," Mr Nesbitt said. It is likely some of the property will be used by Arnotts, some leased to other retailers, and some sold. A detailed planning application in the new year will reveal what the group has in mind.
The accounts state that Arnotts owns 50.1 per cent of Middle Abbey Street Co-ownership (Masco), a partnership which bought the former Irish Independent building on Middle Abbey Street for approximately €26 million. They also state that Mr Nesbitt owns a 7.5 per cent stake in Masco. His co-director, Niall McFadden, also owns a 7.5 per cent stake. The other owners are not identified.
During the year the group paid consultancy fees totalling €299,250 to Wyler Ltd, a company controlled by Mr McFadden. The accounts state that bank loans were €250 million at year's end. Net interest paid was €15.7 million. Tangible assets were valued at €302.6 million.
The group owns 102-103 Grafton Street, Dublin, and the accounts state the group entered into a lease agreement in 2003 with River Island Clothing Co Ltd for an annual rent of €2.1 million. River Island is controlled by members of the family of Arnotts director Clive Lewis.
Mr Nesbitt said that an offer of a higher rent for the property was declined because Arnotts believed River Island was the right sort of retail mix for the street. "We took the longer-term view," he said.
The group and its pension fund owns a subsidiary, Choristar Ltd, which in turns owns property on Henry Street which is let to tenants.
The group employed an average of 994 people during the year, at a cost of €28 million.
Mr Madden said Boyers, on North Earl Street, Dublin, which is part of the Arnotts group, was "doing very well".
