Ikea pieces together another gain in profits despite tough markets

The flat pack furniture giant Ikea has delivered a modest rise in annual profits, driven by an increase in sales and margins.

Ikea, which operates 283 stores in 26 countries, broke with tradition in October to publish its annual results, which showed 7.7 per cent growth to €23.1bn (£19bn) over the year to 31 August. The move was an attempt by Ikea's new chief executive to shed its previously secretive image. The furniture retailer yesterday said net profits grew by 6.1 per cent to €2.7bn. Ikea opened 12 stores worldwide in its last financial year.

Mikael Ohlsson, Ikea's president and chief executive, said: "It was a good year financially for us – sales grew despite tough market conditions in many countries. Profits give us the resources to grow and reach more people in existing and new markets as well as lowering prices."

Mr Ohlsson – who became Ikea's chief executive in September 2009 and is credited with trying to make the company more transparent – said: "The main part of the profit was re-invested in existing and 12 new stores in order to become even more inspiring and accessible. In times like this, even more people appreciate value for money in terms of good design and functional home furnishing products at affordable prices and we are committed to continuing that journey."

In October, Ikea also shed more light on the performance of its UK and Ireland business. The retailer, which has 18 shops in the UK and one in Dublin, said its like-for-like sales rose by 1 per cent to £1.2bn for the year to the end of August 2010.

Martin Hansson, Ikea's UK & Ireland country manager, said: "It has been another challenging year for us but despite the overall home furnishings market being in decline, we have delivered a small growth."

However, an Ikea spokeswoman declined to comment on trading since the end of August. Ikea opened its first UK store in 1989, but its last new store, in Southampton, opened in the 2009 financial year.

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