Primark posts strong half year profits
Adjusted operating profit at the Primark fashion chain surged by 25% to £426 million in the first half of its financial year as the retailer benefited from higher margins.
Operating margin in the first half was 11.7%, which was well ahead of the same period last year when the retailer’s margin was 9.8%.
While like-for-like sales fell by 1.5% overall, revenue climbed by 4.4% due to an increase in retail selling space.
The UK saw like-for-like sales edge up 0.6% with total sales coming in at 2.3% ahead of last year. Primark owner Associated British Foods said the impact of low footfall in the UK in November was offset by good trading in other months of the first half, with strong growth in the last two weeks of the period.
Meanwhile, like-for-like sales in Primark’s Eurozone dropped by 3.2% after the retailer saw a decline in footfall in November across all of its markets. Total sales in the region were 5.3% ahead of last year at constant currency. ABF said trading in Germany is continuing to be difficult, although Primark has strengthened its management team in the country to address this.
ABF said Primark’s strong performance in the in the US was driven by” excellent” trading at its recently opened Brooklyn store.
During the period, the retailer opened new stores in Seville and Almeria in Spain, Toulouse in France and Berlin in Germany. In the UK stores were relocated to larger premises in Harrow, and the Merry Hill and Peckham stores were extended.
George Weston, ABF chief executive, said: ” Primark delivered excellent profit growth, driven by further development of our customer experience and selling space expansion.”
Across the wider ABF business, which also includes sugar, grocery, ingredients and agriculture businesses, revenue increased by 1% to £7.53 billion, while adjusted operating profit fell by the same percentage to £639 million.
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