LUXURY DEPARTMENT store chain Brown Thomas has paid out a €70 million dividend to Galen Weston, the Canadian billionaire who controls the business.

The dividend payment, Mr Weston's first for several years from Brown Thomas, came as the business booked a €54.14 million once-off profit from the sale to a management group of its A|wear fashion subsidiary in May 2007.

Although many retailers bore the brunt of an increasingly difficult trading environment as the economy turned last year, Brown Thomas saw its operating profit from continuing business rise 15 per cent to €23.09 million in the year to February 2008

Pretax profit before taking the profit from the A|wear transaction into account was €26.86 million, 11.3 per cent higher than the previous year. The annualised increase in pretax profit for the year to February 2007 was 17.5 per cent, but the figures are not strictly comparable as the increase in the earlier year took account of a full year of business at A|wear.

Brown Thomas chief executive Nigel Blow warned yesterday that the combined impact of slide in consumer confidence, the credit crunch and worsening economic conditions had created a "more difficult" retail environment.

"Whilst we have yet to trade the busiest period of our year, the group is not forecasting results in 2008 to be as strong as 2007."

In addition, he said the outcome of an ongoing rent review at its BT2 outlet at Grafton Street in Dublin had potential to cut the group's overall profit this year. He acknowledged that difficult conditions would continue into the first half of next year but he would not say whether he expected any upturn in the period after that.

However, he said the group continued to invest heavily in the business and would spend a total of €19.5 million this year on the refurbishment of the department store's prime outlet on Grafton Street and at the BT2 outlet on the same street. Such investment follows expenditure of €8.9 million last year in the chain's stores in Cork and Galway.

"The Brown Thomas group has a very strong balance sheet and will continue to be cash generative. We believe Brown Thomas is well positioned to take advantage of the opportunities that arise from the eventual upturn in the economy and in consumer sentiment." Gross transaction value from continuing operations, which reflects the overall cash flowing through the Brown Thomas group and its concession outlets, rose 8.3 per cent to €271.45 million last year. This strips away some €15.79 million in transactions at A|wear in the first three months of the fiscal year. A|wear's operating profit in that period was €1.57 million.