Brown Thomas sees profits plunge to €22m

BROWN Thomas saw its pre-tax profits plunge from €81 million to almost €22m in the year to February 2009.

According to accounts just filed, the company said its financial performance had deteriorated as the year progressed, “coinciding with the sharp decline in the underlying economic fundamentals of the country and a drop in consumer confidence”. A dividend of just over €7m was paid against €70m in the previous year.

It anticipated in the accounts that trading conditions in 2010 would continue to be difficult, with ongoing pressure on consumer spend and low consumer confidence.

In their report, the directors said they expect management’s focus on costs in the business will partly offset the negative impact on profits of lower turnover in the current year. The directors consider the group’s financial risk profile to be low. “Liquidity and cash flow continue to be strong and credit risks are low due to the cash-based nature of the business and the strong cash flows generated.

The accounts show €2.5m was paid in corporation tax against €4m in the previous year.

Turnover fell from €203m to €180m in the year to February 1, 2009. In the previous year €15.2m was generated from A-Wear, which was disposed of in May 2007 for €71m in cash.

Operating profit was down from €23m to €14.7m. Brown Thomas has three stores in Dublin, Cork and Limerick and three BT2 stores in Dublin. Staff numbers fell from 942 to 895 with staff costs increasing from €40.8m to €43.7m.