Primark shines amid the high street gloom
PRIMARK bucked the downward trend on the high street as soaring profits helped parent company Associated British Food (ABF) to offset currency pressures and an ailing sugar business.
ABF, which is majority owned by the Weston family, said operating profits for Primark soared 15pc to £843m for the year ending September 2018. Sales also rose 6pc to £7.4bn in the same period. Primark makes up roughly 60pc of ABF’s total profit.
The budget fashion retailer’s revenue and profit was boosted by 16 new stores worldwide and better performance in the US, where it has changed its ranges to reflect Americans’ preference for more casual fashion.
Like-for-like sales, which strip out new shops, dipped by 2.1pc as sales in Europe were dented by unseasonable weather. However, likefor-like sales in the UK grew by 1.2pc, despite the fashion retailer having no online store.
George Weston, ABF chief executive, said Primark was investing more in the UK than any other fashion retailer, opening stores and refurbishing its existing 185 shops.
ABF’s grocery business, which includes Ovaltine, Dorset Cereals and Twinings, recorded a 15pc sales rise to £1.6bn during the 12-month period.
But operating profit at the company’s sugar business fell by more than half in to £123m. ABF said that deregulation in the EU sugar market had resulted in a sharp decline in prices and a global surplus.
ABF said statutory pretax profit for the whole company had fallen 19pc for the year to £1.2bn.
Stripping out the sales of its US herbs and spices business and sugar cane division in China meant that adjusted pre-tax profits rose by 5pc to £1.3bn in the year. Total sales for the year rose 1pc to £15bn.
ABF shares closed up 3.0pc at £24.60.