Higher profits in store for Primark owner as sales rise
Published 23/02/2010 | 05:00
Primark owner Associated British Foods (ABF) said yesterday it expects to report "substantially higher" operating profit than a year ago when it releases interim results in April.
In a trading statement, ABF, which is controlled by the Weston family that owns Brown Thomas and Selfridges, said it had been benefiting in the interim period from a strong performance at Primark, which trades as Penneys in Ireland.
Sales during Christmas were ahead of expectations, according to ABF, while it added that profit from its sugar-production unit would be substantially ahead of last year on the back of an "excellent performance" in Europe and market recovery in China.
"The one note of caution I'd put out there would probably be around Primark," said ABF finance director John Bason.
Sales at the clothing chain rose 8pc at outlets open at least a year, the company said.
"When you have had a big increase, another big increase on top of that would be an amazing thing to do," Mr Bason said.
ABF said last month that while sales at the Primark chain had been strong across all its geographies, its Penneys business was being hit by the recession.
ABF, which owns a stable of household brands including Twinings, Ryvita and Ovaltine, has been expanding its Primark footprint across Europe, with stores in Spain, the Netherlands, Germany, Belgium and Portugal. There are 196 outlets in total. ABF said that its stores in Spain had performed extremely well.
Shares in ABF closed flat at £9.34 in London. (Additional reporting by Bloomberg)