IKEA eyeing up further expansion as pre-tax profits at furnishing giant’s Irish operation soar

The Irish arm of Swedish furnishing giant, IKEA is eyeing further expansion here as pre-tax profits last year increased by 82pc to €23.49m.

New accounts filed by IKEA Ireland Ltd show that pre-tax profits surged at the retailer last year as revenues increased by 16.5pc from €216.7m to €252.42m in the 12 months to the end of August last.

The bumper year for the home furnishing retailer resulted in the company increasing its dividend payout by almost four fold from €3m to €11m.

On the company's expansion plans, the directors state that "following the success of the two Plan & Order Points opened last year, we’ve committed to open many more around the country within the next couple of years”.

They state: “During the year, IKEA opened Plan & Order Points in Drogheda, Cork and Portlaoise, with plans to open in more locations in 2024.”

They say that the number of IKEA pick-up points has also radically grown, from only two in 2021 to 11 today.

The directors state that the Plan & Order points "are smaller stores, providing customers with free, bespoke design consultations with experienced IKEA kitchen and bedroom storage experts, enabling complex purchases with shorter travel time to IKEA".

On the company’s future developments, the directors say: "We’re on an expansion journey in Ireland. We plan to invest in new and existing ways to shop and meet people including new Plan & Order Points, a new distribution centre, developing the existing store, and new delivery capabilities; making it easier and more sustainable to shop at IKEA than ever before."

IKEA opened its first distribution centre in Ireland at Rathcoole in April employing over 200 people and directors state that the state-of-the art new build "will enable quicker fulfilment of IKEA products for customers in Ireland, with increased availability and delivery times reduced by more than half”.

The jump in profits and revenues coincided with the firm’s flagship store at Ballymun in Dublin welcoming its 40 millionth visitor last year.

The directors state that “our healthy financial results”, including a 16.5pc growth in revenue outperforming the home furnishing market and gaining market share, “represent our financial stability and resilience amidst great change”.

They highlight that the impact of the war in Ukraine and the subsequent high inflationary pressure “had a significant impact in the global supply chain and in local energy and other costs and as a result both our operating costs and cost of goods sold increased significantly compared to last year”.

The business's operating profits increased by 67pc from €13.38m to €22.44m.

After taking into account net interest payments of €525,797 and receiving a dividend of €1m, the firm recorded the pre-tax profit of €23.49m.

The firm recorded post tax profits of €20.49m after incurring a corporation tax charge of €3m.

Numbers employed by IKEA Ireland last year decreased by 34 from 766 to 732 as staff costs increased from €21.76m to €23.99m.

Aggregate pay for two directors last year declined marginally from €273,522 to €271,466.

The profits last year take account of non-cash depreciation costs of €2.54m while operating lease charges increased almost three fold from €976,606 to €2.86m.

Shareholder funds totalled €47.14m that included accumulated profits of €42.14m. Cash funds totalled €945,957.

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