Primark profits jump as bargain-hunters drive sales
The budget fashion retailer’s market share ‘increased substantially’ in the first half.
Primark has notched up a surge in half-year profits as British shoppers continue to flock to the budget retailer.
The firm, owned by Associated British Foods, saw adjusted operating profit jump 25% to £426 million in the six months to March 2, while sales grew 4% to £3.6 billion.
Like-for-like sales fell 1.5% overall but profit margins were “much higher”, ABF said.
In the UK, sales were up 2.3%, and comparable sales grew 0.6%.
The firm said its share of the clothing, footwear and accessories market in the UK increased substantially in the period, bucking the trend of wider high street malaise.
Primark, which does not have an online offering, recently opened a new megastore in Birmingham to much fanfare.
The strong Primark performance helped ABF record a 2% rise in turnover to £7.5 billion, although pre-tax profit was dragged down by a £79 million exceptional charge linked to pensions and its bread-making arm.
Pre-tax profit came in 15% lower at £515 million in the period.
ABF’s sugar unit also saw profits take a knock as the result of “significantly lower” prices which affected the industry.
Profits dived from £106 million to £1 million.
ABF chief executive George Weston said: “This is a robust set of results. Profit at AB Sugar was substantially reduced but, from this period, we expect our sugar profitability to improve. The strong underlying growth in Grocery profits demonstrates good momentum.
“Primark delivered excellent profit growth, driven by further development of our customer experience and selling space expansion.”
ABF’s grocery arm recorded a 3% sales rise to £1.7 billion while profits jumped 2% at constant currency to £167 million.