High rent costs widen Homebase and Argos Ireland losses

The Irish operations of UK retail giant, Home Retail, Argos and Homebase, both incurred losses last year.

High rent costs widen Homebase and Argos Ireland losses

Newly-filed accounts show that pre-tax losses almost doubled at Homebase House and Garden Ltd, increasing by 89% to €9.05m, in the 12 months to the end of last February.

Revenues declined by 4%, from €45.3m to €43.7m.

A large factor behind the loss was the firm recording an exceptional cost of €5m concerning onerous leases.

The directors’ report states that like-for-like sales increased by 4% as the prior year saw the closure of two stores here.

The directors state that the increase in sales was driven by a broad range of strategic objectives predominantly within seasonal categories.

The number of stores operated by Homebase at the end of the period last totalled 13.

In October 2013, the firm exited examinership and numbers employed reduced from 515 to 491 with staff costs reducing from €9.8m to €8.6m.

Separate accounts by Argos Distributors Ltd show that the firm went into the red last year, recording pre-tax losses of €175,000.

This followed the firm recording pre-tax profits of €8.5m in 2014 — a negative swing of €8.7m.

The loss came in spite of revenues increasing 5.6% to €223m.

The figures show that the firm recorded an operating loss last year of €2.56m.

However, interest receivable of €2.39m resulted in the much smaller loss of €175,000.

Argos’ loss followed steady profits made over a number of years in Ireland — in 2011, Argos recorded pre-tax profits here of €20m. However, profits have steadily declined since.

The firm operates 40 stores here and the chief factor behind the loss was the firm’s cost of sales increasing by more than €20m going from €141.6m to €162.2m.

This resulted in the firm’s gross profit decreasing from €69.79m to €60.74m.

Numbers employed by Argos last year reduced from 1,479 to 1,248 with staff costs reducing from €21.2m to €19.9m.

The pre-tax loss takes account of non-cash depreciation costs of €2.6m.

Accumulated profits at the firm last year totalled €162.16m while the firm’s cash reduced to a total of €26.6m.

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