The quintessentially British luxury department store has cut substantially its dividend payment to its Qatari owners after a drop in turnover.
As explained in a statement, Harrods has reduced its dividend payment by more than 30 percent this year after a fall in turnover caused by “tough trading conditions”.
The investors´surprise has been noticeable as the retailer's financial accounts reveal although profits edged up 4.2 percent, investors will receive a reduced dividend payment of 103 million pounds, a 31.3 percent drop from last year's 150 million pounds – a record payout, as highlights ‘City A.M.’
According to last available Harrods’ financial records, pre-tax profits rose from 140.4 million pounds to 146.3 million pounds for the year ending January,31. On the downside, turnover fell to 769 million pounds from 794 million pounds during the period.
The business explained that its preferred accounting method is gross transactional value, as it measures turnover before adjusting for concessions, staff discounts and the cost of loyalty scheme points. This figure advanced by 1.2 percent to 1.6 billion pounds during the year, while operating profits were also up 2.9 percent to 126.5 million pounds during the period.
Qatar’s sovereign wealth fund, which bought the retailer for 1.5 billion pounds in 2010 from Mohamed Al Fayed, has invested significantly in the business: 48.6 million pounds last year alone. Harrods said the same level investment was expected to continue this year.