Department stores group, Arnotts, is looking for accelerated growth in the second six months following the 10.4 per cent rise in pre-tax profit to £2,887,000 in the six months to July 31st 1998. In common with the move by supermarkets, the Arnotts' stores will have extended shopping hours. The group extended shopping time by one hour from last May and from next month it will trade on Sundays from noon to 6pm.

It is "getting a profit margin" from the existing expansion of hours but it will "take some time for the Sunday trading to build up", said managing director, Mr Seamus Duignan. The store in Henry Street, Dublin, will have a further 20,000 sq ft opened in the second six months which will generate further sales. This space will include the Spanish concession Mango and a new Bargain Shop extending into Abbey Street.

Chairman, Mr Tom Toner, said the refurbishment of the cosmetic department will complete the development programme for this year. The most striking feature in the latest results is the sharp contraction in profit margins from 8.2 per cent to 6.8 per cent. This reflects a £780,000 increase in depreciation, £1 million extra in interest, and larger overhead costs, as a result of the expansion, Mr Duignan said.

The latest figures show that concession sales have received a greater proportion of new space. Group sales grew by 26 per cent to £42.8 million. A breakdown shows a 64 per cent rise in concession sales while core sales had a more modest 34.1 per cent increase.

However, Mr Duignan noted that concessions accounted for 32 per cent of the total space but generate just 26 per cent of the sales while the group's core business accounted for 68 per cent of the space and generated 74 per cent of the sales. "Our buyers are performing better," he added.

Arnotts had a tax charge compared with nil last year. This led to a reduction in profit after tax from £2,615,000 to £1,992,000. Earnings per share dropped from 14.7p to 11.1p (adjusted there was an 8.8 per cent increase). However, reflecting real underlying growth, the interim dividend is being raised from 4.0p to 4.5p.

The group is in a strong financial position with an expected gearing of 38 per cent by the end of the year. Overall, Arnotts should have little difficulty in raising full year pre-tax profit from £7.7 million to brokers' predictions of some £9.2 million.