The growth in business at the world's largest online bike store continued last year with revenues at Chain Reaction Cycles increasing by 14 per cent to £156 million (€185 million).

However, investment in the Co Antrim’s firm’s expansion resulted in pre-tax profits decreasing by 91 per cent from £10 million to £861,000 (€1 million) in the 12 months to the end of December last.

The family business, which started as a village shop, expanded into the Republic in 2011 when it established the Cork-registered Chain Reaction Cycles Ireland Ltd to provide transactional processing services on behalf of the group.

The Watson family online group sells bikes to 100 countries worldwide and the proportion of sales outside the EU in 2012 was 40.5 per cent compared to 39 per cent in 2011.

The numbers employed at the group increased by 32 per cent last year from 465 to 614.

The group’s shareholders received a dividend of €3 million last year and this followed a €3.6 million dividend payout in 2011.

Additional overheads
According to the directors' report "gross margins have been maintained at 32 per cent, however, the group incurred substantial additional overheads which has had a detrimental impact on operating profits in the current year".

“The directors deem this an acceptable performance as they are satisfied the outlay is necessary to build the foundations for future growth.”

The directors said the principal reason for the increase in revenues was a greater volume of transactions.

“The group has invested significant resources in research and development ... At the forefront of this work is the creation of a unique and innovative e-commerce platform, designed to enhance functionality and all aspects of the buying experience.”