ELECTRICAL RETAILER Power City has reported that its sales fell more than 8 per cent last year, suggesting its business was coming under marked pressure even before the recession became entrenched.
Famous for its brash television adverts, Power City saw revenues decline to €95.98 million in the year to September 2008 from €105.07 million in the previous comparable period.
The firm, controlled by the family of Co Wicklow-based businessman Liam McKenna, saw operating profit drop to €6.86 million from €8.78 million while pretax profit fell to €8.34 million from €10.05 million.
Mr McKenna reduced his stake in the business to 12.5 per cent last year from 21 per cent. The beneficiary appears to have been another family member. Shareholders saw their collective dividend reduced last year to €1.38 million from €1.85 million.
Like rival groups DID and Currys-owner DSG International, Power City was a big beneficiary of the boom years when demand for big-ticket household items such as fridges, cookers and laundry and entertainment equipment was stimulated by the expansion of the property market.
Although the collapse of the property market is widely perceived to be putting strain on electrical and household retailers across the board, Power City Ltd did not respond to a request for comment on its latest filings to the Companies Office.
“There was no change in the nature of the business during the year. The directors are satisfied with the results for the year,” says a note to its annual accounts.
The firm employs a total of 215 staff and has outlets in Tallaght, Sallynoggin, Blanchardstown, Finglas, Coolock, Fonthill, Bray and Drogheda.
Accumulated profit stood at €64.57 million at the end of the fiscal year and interest payments on its €44.15 million cash pile came in at €1.99 million.
Power City is regarded as one of the most tightly managed Irish retailers, but its profit margins have come under pressure in recent years. The business had an operating margin in excess of 9 per cent in 2004 and 2005 but this declined to 8.77 per cent in 2006 and 8.36 per cent in 2007. The margin dropped again last year to 7.14 per cent.
Aside from its advertisements and public filings, Power City maintains a low corporate profile and rarely comments on its business. The accounts indicate that the business had no capital commitments last year. “There are no future material changes anticipated in the business of the company at this time.”
