HMV Irish pre-tax profits dip 87.5%

SALES of bestselling CDs by Lady Gaga and the Black Eyes Peas were not enough to prevent pre-tax profits plunging by 87.5% at the Irish arm of HMV last year.

Accounts just filed by HMV Ireland Ltd to the Companies Office show that pre-tax profits dropped by €4.4m from €5m to €631,000 in the year to the end of April 24 last.

The drop comes in spite of HMV Ireland increasing its revenues by 23%, or €16m, last year from €69.7m to €85.8m.

The opening of two stores increasing the number to 16 contributed to increased sales where it is involved in the retail of music, video, electronic games, books and related products.

The accounts show that the company paid €38m in dividends to its British parent last year reducing its accumulated profits from €47m to €9.5m.

In January, its parent, the HMV Group said it was planning to close 40 HMV outlets across Britain and Ireland this year. So far nine of the 40 HMV stores targeted for closure have shut.

According to the directors’ report for HMV Ireland Ltd, the directors state that “the company continues to trade successfully and will continue its existing business for the foreseeable future”.

HMV Ireland’s operating profits dived by 96.6%, from €2.84m to €96,000, during the year. Operating profits were adversely affected by a €330,000 impairment on its property and plant.

The figures show that the numbers employed by the company increased by 106, from 266 to 372, with the company’s staff costs, including directors’ emoluments, increasing by 29% from €7.3m to €9.4m.

The drop in cash deposits from €11.2m to €1.1m during the year resulted in the company’s finance revenue decreasing from €2.2m to €636,000. This contributed to the 87% drop in pre-tax profits.

The accounts include a depreciation charge of €838,000. Directors emoluments for the year declined from €253,000 to €159,000.