Ikea UK pays out £90m dividend to parent as instore sales soar
Ikea reportedly paid out a £90m dividend from its UK business to its parent last year – the first in six years – as the Swedish furniture giant continues to rake in bumper profits.
The dividend, reported by The Sunday Times, reflected the £62.4m profit made in 2021, a year interrupted by a series of lockdowns which forced Ikea to close its stores for about a third of the year.
The dividend points to the strength of Ikea’s UK business after the pandemic impacted its traditional business model based around large out-of-town stores.
The majority of dividends will be reinvested to help the group grow, Ikea said, while the remainder will go to the Ingka Foundation, which was established by Ikea’s founder Ingvar Kamprad, according to the report.
Ikea was contacted for comment on the report.
Ikea’s 2022 results, published in December, saw UK total sales grow by 13 per cent to £2.2bn over the year to 31 August 2022, compared with the same period last year, while profit surged 41 per cent to £88.1m.
Store visits shot back up to 46.3 million from 34.5 million in the 2021 financial year, although visits to Ikea.co.uk fell to 249 million from 303 million the year before.
Commenting on the results, Ikea’s UK chief Peter Jelkeby added: “We saw consumers returning to our stores while online sales remained strong with high demand for a convenient shopping experience.
“To meet these needs, we opened our first small store on the high street, created new ways to meet customers remotely and in-store, and launched new ways to deliver orders,” he said.
The company opened its first small high street store in Hammersmith in February last year and announced it will open a shop on Oxford Street in Autumn this year.
Although Ikea was able to profit from the increase in spending on homeware during lockdown, there are concerns that retailers like Ikea may find the cost-of-living crisis a more threatening economic environment.