€58m boost for Primark owner due to sterling
WEAK sterling is giving a £50m (€58.6m) profit boost to Primark owner Associated British Foods (ABF).
The Dublin-headquartered retail chain, which is ABF’s biggest profit maker, is expected to deliver a 22pc increase in sales during the first half of the group’s financial year based on actual exchange rates.
ABF said that Primark sales would be 12pc higher on a constant currency basis in its first half, and that like-for-like sales across the chain as a whole were level. Primark’s sales in the first half of the last financial year were £2.66bn (€3.1bn), and it generated an operating profit of £313m (€367m) in that period.
The retailer’s total sales increases in the most recent half were driven by new store openings and expansions of outlets.
ABF’s first half ends on Saturday, and the group releases first-half results on April 19.
During the first half, it will have added about 12pc more selling space at Primark.
ABF added that sales in the UK had performed well during the first half of its financial year, rising 2pc on a like-forlike basis.
“Market share increased, reflecting the strength of our consumer offering,” it added.
It said that if a decline in likefor-like sales in the Netherlands was excluded, total Primark like-for-like sales rose 1pc in the period. ABF said the fall in likefor-like sales in the Netherlands was due to a “particularly rapid increase in selling space”.
ABF – whose activities also extend to agriculture, sugar production and grocery brands – said that Primark stores opened in the past six months had traded strongly, and that its US business “continued to develop”.
The first US Primark store opened in 2015. The retailer now has six outlets there and will open its first New York store on March 16.