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Last Updated: Thursday, 20 October 2005, 11:25 GMT 12:25 UK
Arcadia nets Philip Green 1.2bn
Philip Green
Philip Green has transformed Arcadia since he took it over
Entrepreneur Philip Green has announced a "conservative" 1.3bn ($2.30bn) dividend payout to shareholders from his Arcadia fashion empire.

Mr Green owns 92% of the group and will receive 1.2bn for his own investment vehicles - the other 8% is owned by banking group HBOS.

Pre-tax profits at the privately-held group rose to 252.79m ($444.96m), compared to 246.33m last year.

Arcadia's empire includes Top Shop, Dorothy Perkins and Etam.

"Forget the scale of the number," Mr Green told Reuters. "It's on a very conservative basis as a ratio to the cash we generate."

The 1.3bn dividend from Arcadia contrasts with the failure of Mr Green's other business, Bhs, to give out a dividend with its annual results last week.

Midas touch

Operating profits at Arcadia rose 10.1% to 326.1m, but current trading conditions were described as challenging and extremely competitive.

"The cost of doing business is going up," Mr Green told the BBC.

He said business for Britain's clothing retailers was tough due do a combination of the economy and the weather.

And he pointed out that "some clothing is at the same price it was 10 years ago".

When you get to this level of wealth, business becomes a game or a challenge
Henk Potts, analyst

During the financial year, the chain added 95 stand-alone stores along with a refubishment programme across the stores costing 65m.

Operational improvements, Mr Green said - particularly in stock control and speed of delivery to stores - helped Arcadia generate over 400m.

"The performance has given us the confidence to both pay the dividend and, more importantly, to continue the high level of investment in the business," said Mr Green.

His 1bn-plus windfall comes only three years after Philip Green paid 850m for Arcadia. He has been described as having "the midas touch".

Another bid?

Now analysts are speculating about how he will spend the cash and whether he will consider another attempt to buy M&S after he lost last year's high profile bid battle.

"When you get to this level of wealth, business becomes a game or a challenge," said Henk Potts of Barclays Stockbrokers.

"I'm sure he still wants to prove that he was right with his offer for M&S last year.

"He walked away from M&S in the end, so maybe this is him saying to shareholders that perhaps they should have taken the offer."

However, Philip Green told the BBC that he did not have any territorial ambitions as yet.

"We are not looking at any business anywhere," he said.




BBC NEWS: VIDEO AND AUDIO
Hear Philip Green's views on the dividend



SEE ALSO:
Green snaps up Etam fashion chain
08 Apr 05 |  Business
Green pockets 40m Bhs dividend
13 Oct 04 |  Business
The Battle for Marks and Spencer
05 Oct 04 |  Business
Green plans 10m retail academy
23 Sep 04 |  Education
Green ready for High Street war
10 Sep 04 |  Business
Arcadia warns of spending slowdown
10 Sep 02 |  Business


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