Discount fashion retailer Primark has defied the current gloom on the high street to record double digit sales grow for the last three quarters of trading, according to results published today.
Primark revenues in the 40 weeks to June 25th 2011 rose by 13 per cent compared to the same period last year and were up 14 per cent at constant currencies.
During the last quarter trading has been even stronger, boosted by both an increase in selling space and improved underlying performance, with like-for-like sales in the UK & Ireland increasing 15 per cent year-on-year.
Associated British Foods (ABF), which owns Primark as well as several consumer brands and commodity operations, has seen its revenues rise 9 per cent so far this year.
Retail was the second best performing segment for ABF during the period, only bettered by its agriculture business, but today’s statement warned that January’s rise in VAT and the high level of discounting has hit Primark’s margins.
Since the start of the group’s third quarter six new Primark outlets have opened, three in the UK, two in Portugal and one in Spain, bringing its current store portfolio to 220 with a new 46,000 sq ft store at Westfield Stratford due to be unveiled in September.
A statement from ABF read: “Higher commodity costs, which were the principal reason for the larger than usual increase in working capital in the first half, continued to affect cash flows in the third quarter.
“Capital expenditure remained substantially ahead of last year driven largely by the increased level of investment in new stores for Primark.
“Trading for the group since the half year remains on track to deliver adjusted earnings for the full year similar to last year’s very strong result.”