Profits slump at DIY retailer Associated Hardware

Pre-tax profits at retail hardware group, Associated Hardware last year fell 63.5% to €562,697.

New accounts for the company show the drop in profit in spite of revenues rising 17% from €55.2m to €64.7m.

Revenues have recovered to their highest point since 2011, having fallen 76% from a peak of €205m in 2007 to a low of €49.2m in 2013.

Since 2013 revenues have risen 31%.

“We’re pleased to have delivered another year of strong performance for our members and are firmly focused on generating greater revenues and profitability in 2016,” said Associated Hardware chairman Padraic Glynn.

“We expect market conditions to improve further throughout this year as a result of increased construction activity and improved consumer sentiment, and we are ideally positioned, through our nationwide network of members, to leverage momentum in the marketplace and deliver on our ambitious expectations,” he said.

The group recorded the fall in pre-tax profits from €1.5m to €562,697 as a result of exceptional items which boosted profits in 2014, but impacted profitability in 2015.

Established in 1972 to enhance the purchasing power of independent retailers to enable them to better compete with larger multiples, Associated Hardware has over 50 members in Ireland trading under the Homevalue brand that employ 750 staff.

Associated Hardware supports local Irish hardware retailers, which have annual retail sales of about €200m, through a business model that prioritises member profits and rebates.

“While our trading environment remains highly competitive, we have a clear plan in place to grow and support our members and we are exploring every opportunity to grow sales throughout the business,” said Mr Glynn.

On the Government’s proposed housing plan, he said: “Ireland’s current housing supply is a major challenge and we would welcome any government intervention that would create positive and sustainable momentum across the construction sector.”

“Previous initiatives like the Home Renovation Incentive Scheme have been effective in supporting Ireland’s existing housing supply.

“However, we now must look to high-quality and well-planned housebuilding as the next step in dealing with Ireland’s housing shortage,” he said.