The parent company of Primark has posted a quarterly update that shows strong sales at the low-cost fashion chain, bolstered yet again by the Brexit-hit pound.
Associated British Foods’ (AB Foods) third quarter revenue growth was 13 per cent at constant currency and 20 per cent at actual exchange rates, which has been attributed to increased profitability at Primark.
The low-cost fashion retailer also benefited from strong Easter trading and its UK turnover has grown nine per cent in the year to date.
Overall, Primark sales are 13 per cent ahead compared to this time last year at constant currency, and 21 per cent at actual exchange rates.
AB Foods said its outlook for the full year has marginally improved due to Primark’s better-than-expected performance, but warned that the benefits from the sterling slump would not last.
Despite this, the company – which also generates revenue in Asia, Europe and the Americas and also owns Twinings tea, Kingsmill bread and Silver Spoon – said it expected to report good growth in adjusted operating profit and adjusted earnings per share for the year.
“The results to date reflect a material translation benefit from the devaluation of sterling following the result of the UK referendum on EU membership in June last year,” the company said in its trading update.
“At current exchange rates, the translation benefit will be significantly less in the last quarter of our financial year.
“The underlying operating performance of the group during the third quarter was ahead of our forecast as a result of a stronger profit delivery from Primark which has marginally improved our group outlook for the full year.”