The opening of several new Marks & Spencer (M&S) outlets helped bring the British retailer's Irish sales above €500 million for the first time last year, according to senior retail industry insiders.

The Irish unit has long been regarded a star performer for M&S but the sales figure is considerably higher than previously speculated.

As M&S confirmed its recovery was on track with a 35.1 per cent rise in adjusted pretax profits to £751.4 million (€1.1 billion), its chief executive Stuart Rose said the chain's Irish business was performing well.

"It's a great environment to trade in and I think we've got a great future there," he said.

The increase in profits came only a year after M&S profits fell by 19 per cent after it spurned a bid for the chain from the British retail magnate Philip Green.

In remarks to The Irish Times, Mr Rose said the M&S brand in Ireland was not damaged by the negative publicity that surrounded the chain after Mr Green's approach.

"During the difficult times we had here, particularly during the height of the bid two years ago, the brand in the UK suffered more than the brand in Ireland," he said.

"And I think the customer came in in Ireland and said: 'look we like Marks & Spencer, we like what the brand offers us, we don't worry about all this corporate stuff', whereas in the UK we were very heavily affected by what the press were saying about us every day, which damaged the brand."

In line with the long-standing M&S policy of not publishing accounts for the Irish unit, Mr Stuart declined to specifically comment on the chain's financial performance here.

However, other senior retail insiders said the rise in Irish sales last year was "well into double-digits".

Such a rise in sales was in line with a 14.7 per cent rise to £522.7 million in the level of all M&S sales outside Britain. This includes eight company-owned stores in Hong Kong and 198 franchise outlets in Europe, the Middle East, India and Asia.

Irish sales of €500 million would convert to £340 million, so it is clear that the Irish unit forms a major part of the group's international unit.

"Our wholly-owned stores in the Republic of Ireland also continued to perform well, reflecting both new openings, and improvement in the performance of existing stores," M&S said.

Retail insiders said the operating profit margin in the Republic was in line with the 12.56 per cent margin in the international unit generally, but that the unit's margins last year reflected the heavy capital investment in the business since 2003.

M&S has invested some €100 million in new stores in the interim, including the opening of outlets last year in Blanchardstown and Dundrum in Dublin.

The chain maintained only four Irish stores until 2003 before embarking on a big expansion, mainly outside central Dublin.

M&S opens a 13th Irish outlet in Drogheda next month and another 3,700sq m (40,000sq ft) store will open late this year or early next year at the extension to the Square shopping centre in Tallaght.

The chain's Ireland executive Neil Hyslop declined to reveal the level of overall capital expenditure in the current year. However, Mr Hyslop said it included €10 million each in respect of refurbishments at its Mary Street store in Dublin and its store in Cork.

M&S group sales rose 4.1 per cent to £7.8 billion. Mr Rose said the business was in good shape but added that he was under no illusions about the work necessary to place the group firmly on the path to long-term recovery.

"We are very happy with Ireland. It's an area that we want to extend going forward and frankly that's about finding sites," he said.

"It's a competitive environment and like all retailers we want the right space in the right location." Asked where the Irish business would be in 12 months time, he said: "Well there'll be more stores. There are more stores opening. We just signed up a few.

"We've got a big expansion programme, both in the Republic and the North, and that's encouraging."

The group declared a final dividend of 9.2p per share, bringing the total dividend to 14.5p, up 15 per cent on the previous year.