Primark sales benefiting from Brexit-hit pound

Retail: Fashion chain’s owner sees sales leap 22%

Primark owner Associated British Foods (ABF) said sales at the retailer have jumped by more than a fifth thanks to a boost from the Brexit-hit pound.

The high street fashion chain saw sales at actual exchange rates leap 22% compared with last year as it also benefited from a 16% increase in selling space in the 16 weeks to January 7.

Like-for-like sales for the period were good and market share stepped up, but group like-for-like sales were pegged back by a drop-off in Germany and the Netherlands.

ABF group revenues rose 22% as the company enjoyed a fillip from sterling’s weakness.

On currency, the firm said its operating profit margin would decline during the year as it grapples with the impact of the strong dollar on input costs.

ABF was also riding high on the back of a “substantial increase in profit” for its sugar business after higher sugar prices bolstered production in Africa.

Revenues at AB Sugar at actual exchange rates were up 38% on last year and up 22% at constant exchange rates.

“With 2016/17 forecast to be a second year of global sugar deficit, world prices are much higher than last year,” the group told investors.

Liberum analyst Robert Waldschmidt said that he expects a “strong rebound” in full-year group profits in 2017, as the sugar business recovers and Primark continues it store roll-out programme.

“We estimate Primark can double sales and profits over the next five years,” he added.

Primark at Dundee Overgate. Sales at the chain have risen by more than 22% thanks to a boost from the Brexit-hit pound.