HARRODS HOLDINGS, the master company that controls Mohamed al-Fayed’s retailing operations, has been making smaller profits than previously declared, newly available accounts show.

Figures for the group, covering the 12 months to the end of January 2006, were lodged with Companies House just before Christmas. They put operating profits for continuing operations at £33.9m, marginally up on £33.1m in the previous 12 months. The accounts say total operating profits — including discontinued operations — were £35.5m for the year to last January against £37.8m in the year to January 2005, a fall of £2.3m.

But the 2005 figures have been restated since the accounts were originally filed. The company now says costs in 2005 were significantly higher than claimed. Hence the overall operating surplus for 2005 was only £37.8m, rather than the £41.5m given last December.

If the £41.5m figure had been allowed to stand, Harrods Holdings’ 2006 operating profits would have shown a decline of £6m, a fall of more than 14%. Harrods says in its latest accounts that the company has now fully adopted two accounting standards — FRS15 and FRS17 — “with the result that certain figures relating to the prior year have been restated”. It does not say if the adoption of these standards explains the full extent of the changes made in the figures for 2005.

Harrods Holdings includes an estate agent, insurance broker, Harrods Bank and aviation companies as well as the Harrods department store in London’s Knightsbridge.

Pre-tax profits for the group rose strongly, the latest accounts say. The 2006 figure was £25.8m, against £10.1m in the 12 months to January 2005. But the scale of the increase is helped by a revision of the 2005 figure: a year ago, pre-tax profits were given as £15.5m, some £5.4m higher than the total now being declared. And more importantly, the 2006 pre-tax total was boosted by one-off factors — sales of a discontinued business and fixed assets.

These gains lifted the pre-tax profits figure by £14.9m. During the 2006 financial year, Harrods Holdings sold Kurt Geiger Ltd for £46m. On top of the profit on the sale itself, Harrods gained earnings of £1.7m from Kurt Geiger in the five months before the business was sold in July 2005.

The latest accounts give a glimpse of the extent to which Harrods’ finances are entwined with those of Fulham Football Club, which Fayed also owns.

Notes to the accounts say: “During the period, the group recharged payroll and made administration charges to Fulham Football Club (1987) Ltd, amounting to £32.5m . . . the debtor outstanding at the period end was £40.3m (2005: £16.2m).’’

The £40.3m marked the peak of the amount Fulham owed Harrods during the year. By the time the accounts were signed off in July, the only money owed by Fulham was £22.9m under a secured loan agreement.

Harrods’ accounts are audited by Grant Thornton.

Most of the money taken out of Harrods by Fayed comes in the form of dividends. But the latest accounts show that in the year to last January, the highest-paid director, thought to be Fayed himself, was paid £5m in salary, eight times the previous year’s £624,000.