€2m a week spent at Ikea’s Dublin store

Shoppers at Ikea’s Irish store in Dublin last year spent almost €2m per week on home furnishings leading to the store almost doubling pre-tax profits to €5.8m.

Accounts just filed by Ikea Ireland Ltd show the firm increased its pre-tax profits by 96% from €2.97m to €5.8m in the 12 months to the end of August 31 last.

With bestsellers such as Billy bookcases, Expedit storage units and Lack tables, revenues increased marginally from €102.6m to €103.98m.

The 2013 performance represents a turnaround in terms of the store’s profitability after it saw a decline in pre-tax profits from €11.4m in its first full year of operation in 2010 to €2.97m in 2012.

The Ballymun outlet — equivalent in space to five and a half soccer pitches — contains 9,000 home furnishings, a 550-seater restaurant, food hall, creche and 1,850 car parking spaces.

According to the directors’ report “the directors are satisfied with the results of the company for the year. The directors anticipate that the level of activity and profitability in future years will continue to be in line with expectations”.

The increase in pre-tax profits arose from lower cost of sales and lower interest charges along with the increase in revenues.

The figures show that the firm’s cost of sales reduced from €71.7m to €70.5m with bank interest payments reducing from €2m to €1.78m.

The store’s operating profits increased by 19% from €5m to €7.6m. Interest payments totalling €1.78m reduced profits to €5.8m. The firm paid corporation tax of €957,172 to give a post-tax profit of €4.87m.

The profit takes account of non-cash depreciation costs of €3.84m — the accounts give a book value of €76.8m of Ikea’s land and buildings at Ballymun.

On the firm’s principal risk and uncertainties, the directors state that the principal risk “is the downturn in the Irish economy. The directors remain confident that Ikea will continue to gain market share”.

The directors add that the downturn in the economy has adversely affected the Irish retail environment and trading of the group.

The directors state: “However, these threats are not considered to be significant and it is the opinion of the directors that Ikea will continue to gain market share during this slowdown.”

The figures show that the numbers employed by the firm last year decreased from 435 to 412 with staff costs increasing marginally from €9.53m to €9.6m.

The Irish unit’s accumulated profits totalled €10.9m at the end of August last year with €1.59m in cash.

Last year, Ikea recorded global revenues of €27.9bn employing 135,000 in 303 stores in 26 countries.