Power City posts pre-tax profits drop of 32% from €11.1m to €8.4m

POWER CITY, the Irish-owned electrical good retailer, saw a 32% fall in pre-tax profits last year.

Accounts for the company, just filed at the Companies Registration Office, show profits for the year to September 30 2003 fell from €11.1 million to €8.4 million. No reason was given in the accounts for the decline in profits.

Turnover for the period slipped from €88.2 million to €87.3 million.

The electrical goods market is highly competitive in Ireland with a number of Irish players, such as Power City and the ESB, competing with foreign players. Dixons, the British giant, has expanded rapidly in Ireland and now has annual revenues in excess of €100 million from its 15 outlets, while the Australian retailer, Harvey Norman, entered the Irish market last year with two outlets in Dundalk and Dublin, sparking a price war.

The Power City accounts reveal that although 2003 was a bad year for the company, retained profits were €33.4 million and it has €22.3 million in cash on its books. Shareholders funds stood at €34.8 million at the end of its financial year.

Directors' salaries for the year were up to €726,800 from €481,388. The company has eight directors, including the five members of the founding McKenna family who still own the business.

They were paid a total of €533,543 in dividends.

The accounts shows that the directors had €1.89 million in outstanding loans from the company at the end of the year, with Dermot McKenna owing €701,517.

During the year, the shareholding structure of Power City changed.

Liam McKenna Snr saw his stake halve from 50% with the 25% block go to two other members of the family - Sinéad and Aidan. The remaining shares are held by his son Liam Jnr and Dermot McKenna.