THE OWNERS of electrical retail chain Power City, famous for its brash advertisements, have increased their annual dividend by more than 400 per cent to €1.85 million, new filings reveal.

A 72 per cent rise to €1.69 million in interest payments on its €37.86 million cash pile helped the business deliver a 9.3 per cent rise in pretax profits to €10.05 million in the year to September 2007. The profit retained by the business rose to €60.03 million at the end of the fiscal period, from €54.87 million a year earlier.

But Power City’s annual operating profits were virtually unchanged last year at €8.78 million, even though turnover rose 4.9 per cent to €105.07 million.

As conditions became tougher in the retail sector at large, this implies a decline to 8.36 per cent in the firm’s operating profit margin, from 8.77 per cent.

Regarded as one of the most tightly managed Irish retailers, Power City enjoyed an operating margin in excess of 9 per cent in 2005 and 2004.

The company was for many years a major beneficiary of the property boom, which stimulated demand for big-ticket household items such as fridges, cookers, and laundry and entertainment equipment. The extent to which the downturn in that sector has had an impact on Power City in the current fiscal period is unclear.

In keeping with its low corporate profile, the company did not respond to a query yesterday.

The Power City business is controlled by the family of Co Wicklow-based businessman Liam McKenna.

The dividend paid to shareholders in the current year increased from €445,269 in the previous period.

The chain has six stores in Dublin. It employs 226 staff.