Profits at Argos decline 17% to €23m

PRETAX PROFITS at the Irish unit of British catalogue and online retailer Argos last year fell by 17 per cent to €23.2 million.

According to accounts just filed by Argos Distributors (Ireland) Ltd, revenues at the firm dropped by 25 per cent, from €273 million to €205.2 million, in the 12 months to the end of February 2010.

The directors state that revenues declined “due primarily to the current economic climate and resulting retail downturn”.

Pretax profits reduced from €28.1 million to €23.2 million.

The accounts show that the UK- owned catalogue retailer’s operating profits last year fell by 38 per cent from €41.9 million to €25.9 million. The directors’ report states this arose as a result of the 25 per cent decline in revenues, which in turn resulted in gross profits falling from €106.9 million to €86.7 million.

The company recorded finance expenses of €13.7 million in 2009 compared to €2.7 million in 2010. The accounts also include depreciation costs of €3 million.

Argos operates 39 stores nationwide and the directors state that the company implemented cost saving initiatives during the year.

Staff numbers fell by 99, from 1,373 to 1,274, with staff costs down from €22.2 million to €22.1 million. The accounts show that the company’s cost of sales dropped by 28 per cent from €166 million to €118 million, while its net operating expenses fell by 6 per cent from €64.9 million to €60.7 million. That included administrative expenses dropping from €12 million to €9.5 million.

The directors did not recommend paying a dividend last year.