Dell sales unit raises profit to €11.5m

THE Dublin-based sales and support operations of computer giant Dell increased pre-tax profits last year by 5.7% to €11.5 million in spite of a drop in revenues.

Documents just filed with the Companies Registration Office by Dell Direct show revenues at the company in the 12 months to the end of January this year declined by 27% from €141.9m to €104m.

However, the company recorded an increase in its pre-tax profits after last year reducing its costs base 28.5% or €37.8m from €131.9m to €94.1m. This involved Dell Direct’s workforce at Cherrywood, which houses Dell’s direct sales and telephone-support operations for Ireland and the home and SME business sector in Britain, reducing by 18.4% or 241 from 1,307 to 1,066 last year.

The job losses arose from Dell announcing organisational changes across its European, Middle East and Africa operations “to improve competitive advantage and long-term profitability”.

These changes were part of the company’s €4 billion “cost-initiative” plan, which also saw the closure of Dell’s manufacturing operations in Raheen industrial estate in Limerick. Production moved to a new plant in Lodz, Poland, with the loss of 1,900 jobs.

The job cuts at Dell Direct last year reduced the company’s staff costs by €20m from €98.5m to €78.5m.

The directors describe the company as operating “one of the largest customer centres of its kind in Ireland” and the figures show selling expenses last year came to €6m, while other operating expenses totalled €88m, down from €123m in 2008. The company’s operating costs include payroll and administrative expenses.

The recognised profit of €10m, after payment of €1.2m in tax, was added to the company’s retained profits and the directors did not recommend payment of a dividend.

Accounts show the company had accumulated profits of €87.2m at the end of January this year with total shareholder funds at €113m.

Dell Direct received grants from the IDA worth €3.8m last year – a rise on the €2.9m in 2008.