Pre-tax profits at the Irish arm of British billionaire Mike Ashley’s Sports Direct, Frasers and BrandMax stores last year declined by 41% to €40.9m.
New accounts show Mr Ashley’s Heatons Limited recorded the drop in profits as revenues increased by 4% from €202.8m to €211.13m in the 12 months to the end of April 2023.
The profits were boosted during the year by a €10m reversal in an onerous lease provision which followed a €32m onerous lease provision reversal in the prior year.
The directors say “the provision was reduced based on current trading performance and management’s expectations for the future”.
The pre-tax profits of €40.9m followed pre-tax profits of €69.08m in 2022.
The directors say the company “is one of the largest retailers in the country”, and the business “has an unrivalled product range and value for money product offering, which has made SportsDirect one of the largest sports retailers in the country”.
They say they and management “are focused on continuously improving efficiency to minimise the cost base of the company”.
The business — which has its Irish HQ at Heaton House at the IDA Business Park in Whitetown, Tallaght — recorded post-tax profits of €35.26m after incurring a corporation tax charge of €5.64m.
The pre-tax profit last year also takes account of non-cash depreciation costs of €3.8m and foreign exchange losses of €622,321.
The group’s operating lease costs last year increased from €11.96m to €14.43m.
The directors state that the company is continuing to pursue expansion through the rigorous selection of suitable premises in suitable locations.
Th directors say “however, if these sites are unavailable or are too expensive, this will limit the company’s growth in the future”.
Numbers employed last year reduced from 1,249 to 1,242 as staff costs increased from €29.27m to €31.51m.
Directors’ emoluments last year increased sharply from €346,247 to €431,468.
At the end of April 30 last, Heatons Ltd had shareholder funds of €110.4 m that included accumulated profits of €109.72m. The company’s cash funds reduced from €11m to €7.5m.
The company received zero Government Employment Wage Subsidy Scheme (EWSS) last year after receiving €3.72m under that heading in 2022.
The firm last year did benefit from €2m in other operating income that was chiefly made up of €1.93m in management fee income.
Underlining the firm’s continuing investment in the business, the company had a commitment for capital expenditure of €5.94m at the end of last April.
Mike Ashley is best known outside the business world through his former involvement with Premier League team Newcastle United and in 2021 he sold the club for £305m to a Saudi-led consortium.