Losses at Carphone Warehouse's Irish arm soared to €12m last year
The retailer has spent lots of money on its new ’3-in-1′ stores.
LOSSES AT THE Irish arm of Carphone Warehouse jumped from about €2.5 million to almost €12 million last year, new figures show.
Accounts for Carphone Warehouse Ltd, the Irish subsidiary of the UK-based retailer, show that the firm reported a full year loss of just under €12 million in the year to the end of April 2016.
This compared to a loss of €2.5 million in the 57 weeks to the start of May 2015.
The change in year-end reporting was so that the company could align with the Dixons Carphone group.
While the company’s cost of sales dropped, from €90.2 million to €85.3 million, turnover also fell, from €123.7 million to €114.1 million.
Operating expenses rose slightly, from €35.3 million to €37 million.
The firm reported an operating loss of €11 million, which rose to a full year loss of about €12 million when some interest payments and charges on intercompany loans were included.
This pushed up Carphone Warehouse Ltd’s accumulated losses, which rose from €38.6 million to €50.6 million.
3-in-1 stores
The company did incur exceptional costs during the year. Carphone Warehouse agreed a merger with Dixons in 2014, and during the 2016 financial year the newly formed business launched a major roll out of its ’3-in1′ store concept across Ireland and the UK.
According to the directors report: “This involves merging the remaining PC World and Currys stores and inserting a Carphone Warehouse, reducing the overall UK and Ireland store portfolio by 76.
“The costs associated with this initiative, being early lease termination premiums, onerous lease provisions, fixed asset impairment and redundancy costs, have been treated as exceptional items (of) €3.65 million.”
The company also said that its accumulated losses of €50.6 million “reflects an ongoing competitive marketplace, impacting trade margin during the financial period and provisions in respect of the property realisation plan”.
“The directors have reviewed budgets and cash flow projections and they believe with the financial support from Dixons Carphone plc, the company has adequate financial resources to meet current and foreseeable working capital requirements.”
The company employed 729 people during the year, down from 749 the year before leading staff costs to fall from €19 million to €18.1 million.
In the directors report, Carphone Warehouse also said: “The company is conscious of the effect of wage inflation on its business and the need to ensure that this is controlled.”
Carphone Warehouse did not respond immediately to a request for comment.
