An aggressive expansion of new stores and strong performance in the UK has allowed value retailer Primark to record upticks in sales and profits in the first half of its fiscal year.
Revenue at the fashion chain grew by 11 per cent at a constant currency basis in the 24-week period to March 4, from £2.7 billion a year earlier to £3.2 billion.
Meanwhile, operating profit grew 3.2 per cent from £313 million to £323 million year-on-year.
During the half-year period, Primark opened a total of 16 new stores globally – five of which are in the UK – totalling in 800,000sq ft of new selling space. It now operates 329 stores.
In the UK market alone, Primark‘s parent company Associated British Foods (ABF) said the chain “performed well”, with like-for-like sales growth of seven per cent on a total basis and a “strong increase” in its market share.
“Primark delivered a substantial increase in selling space which, together with its strong consumer offering, contributed to a further increase in our share of the total clothing market,” ABF chief executive George Weston said.
Meanwhile, adjusted pre-tax profit for ABF as a whole surged 35 per cent to £624 million, while sales went up by 19 per cent to £7.29 billion.
READ MORE: Primark sees 11% sales jolt
Primark accounts for more than half of ABF‘s profit.
While ABF warned profit growth in the second half would be affected by the weaker pound pushing up the cost of imports and Primark‘s input costs, it said the outlook for full-year profits had improved.
ABF also insisted it would all it can to avoid the currency impact on Primark‘s margins.
“The growth in earnings achieved in the first half has been excellent,” ABF chairman Charles Sinclair said.
“We expect the underlying revenue momentum in all of our businesses to continue in the second half.
“However, profit growth in the second half will, at current exchange rates, be tempered primarily by a smaller translation benefit and the full effect of the devaluation of sterling against the US dollar on Primark’s margin.”