Primark owner's shares fall as investors fret about currency swings
Primark owner Associated British Foods (ABF) has warned that £20m (€22.4m) will be knocked off its profits in the current financial year as sterling strengthens against currencies, excluding the euro.
Shares in ABF fell more than 3pc in early trading yesterday as investors fretted over the group's exposure to volatile global currencies. Two-thirds of ABF's group operating profit is earned outside the UK.
ABF said sales at Dublin-headquartered Primark for the group's full financial year are expected to be 5.5pc ahead of last year on a constant currency basis, driven by increased selling space offset by a 2pc decline in like-for-like sales. It also plans to enter its 12th market for Primark, with the first store in Slovenia opening in the next financial year, in the country's capital, Ljubljana.
The group said that Primark, which trades as Penneys in Ireland, had performed well in the financial year that ends this week, with full-year sales there likely to be 6pc ahead of last year. It said that Primark's share of the clothing market there has "increased significantly". The chain suffered a loss of one store - following a blaze in a key Belfast branch,
It added that Primark's like-for-like performance as a whole were crimped by a sales decline in northern Europe, where it said that three bouts of severe weather during the financial year led to difficult retail conditions.
Primark's latest store in the United States, in New York's Brooklyn, opened in July. It's the ninth store in the US. Primark has also reduced the amount of selling space at two of its US outlets.
ABF's interests extend across clothing, agriculture and consumer products.