Expanding McDonald's Ireland revenues increase to €86m as firm pays out €51m dividend

The fast food brand is currently expanding and has planning applications for new restaurants before local authorities in Tipperary, Wexford, and Westmeath.

Pre-tax profits at the Irish arm of US fast food giant McDonald’s in 2023 decreased by 16pc to €36.32m.

New accounts for McDonald’s Restaurants of Ireland Ltd show that pre-tax profits decreased as revenues rose by 6% from €80.56m to €85.65m in 2023.

The company operated no McDonald’s outlets during the year and generated its revenues from amounts charged to franchisees with the number of franchisee restaurants increasing by one to 95 in 2023.

2023 was the first full year that McDonalds did not operate its own restaurant here after the last owner-operated McDonald's switched to a franchised operation at Dublin Airport on February 28, 2022.

The move to exit the owner-operator model here came 45 years after McDonald's opened its first fast-food restaurant in Ireland on Dublin’s Grafton Street.

The fast food brand is currently expanding and has planning applications for new restaurants before local authorities in Tipperary, Wexford, and Westmeath.

The pre-tax profits of €36.32m in 2023 follow pre-tax profits of €43.16m for 2022 and the bumper profits of recent years resulted in the company paying out a dividend of €51m in 2023 — more than double the dividend of €25m paid out in 2022.

Pre-tax profits reduced after cost of sales rose by €7.9m to €65.09m while administrative expenses increased by €5.88m to €31.06m.

 The directors state that the main reasons for the increases were a €3.8m debtor write-off; a €2m cost arising from a site disposal; an additional €2.6m in inter-company royalties and an additional €2m in non-cash depreciation costs.

The 2023 revenues easily outstripped the pre-covid revenues of €69m in 2019.

The directors state that revenues increased due to an increase in the underlying turnover of franchisees “as their business further recovered from the impact of covid-19 in 2023”.

With planning applications before various local authorities for new restaurants, the directors state that “the company anticipates further expansion of its operations in the Republic of Ireland”.

Underlining the healthy business operated by McDonalds franchisees, separate accounts lodged by the operator of the first McDonald’s outlet in Ireland on Dublin’s Grafton Street recorded pre-tax profits of €4.68m in 2023.

Owned by Amir Afsar, Persian Restaurants Ltd operates a number of McDonald's restaurants in Dublin, Wicklow, and Wexford including the outlet on Dublin’ Grafton Street and the company’s revenues increased by 9% from €48.28m to €52.72m in 2023.

Operating profits at McDonald’s Restaurants of Ireland decreased by 20pc from €42.75m to €34.03m in 2023.

However, profits were boosted by net interest income of €2.45m compared to €214,000 in 2022 contributing to a pre-tax profit of €36.32m in 2023.

Staff costs

With the switch of the Dublin Airport outlet in 2022 to a franchised operation, numbers employed reduced from 28 to 18 with zero employees in ‘store operations’ in 2023 compared to 12 under that heading in 2022.

Staff costs reduced from €1.84m to €1.49m The firm recorded a post tax profit of €27.3m after paying corporation tax of €8.97m.

The operating profit takes account of combined non-cash depreciation and amortisation costs of €6.48m.

The company’s lease costs decreased from €16.48m to €14.62m.

The firm also benefited from an onerous lease credit of €4.59m.

At the end of December 2023, the firm had shareholder funds of €84.93m that included accumulated profits of €5.24m.

The company’s cash funds decreased from €53.56m to €45.58m.

McDonalds works with over 9,000 Irish farmers who supply the cuts for McDonald’s burgers.