Primark has recorded an increase in annual sales and operating profit despite a dip in like-for-likes, aided by the value retailer’s expansion throughout the year.
For the year ending September 15, the Associated British Foods-owned retail chain saw sales grow to £7.47 billion – a six per cent year-on-year increase at actual exchange rates and 5.2 per cent at constant currency.
The sales growth was driven by increased selling space, which in turn caused a 2.1 per cent drop in like-for-likes.
Primark also attributed its dip in like-for-likes to “unseasonable weather in three distinct periods during the year”.
Meanwhile, operating profit margin increased to 11.3 per cent from 10.4 per cent and, as a consequence, adjusted operating profit came in £843 million – a 15 per cent year-on-year increase at actual exchange rates or 13 per cent at constant currency.
In the UK, Primark said sales grew 5.3 per cent while like-for-likes increased 1.2 per cent, thanks to a “significant” increase in the retailer’s share of the country’s clothing market.
The retailer’s historic store in central Belfast was destroyed by fire during the year, and Primark confirmed it would “shortly re-establish a trading presence in Belfast with the opening of a store in Commonwealth House”.
The retailer was also “committed to working with the authorities to restore Bank Buildings over the longer term” and added that “the full replacement cost of the building and resulting business interruption is insured”.
Primark’s overall retail selling space around the world increased by a net 0.9 million sq ft with 15 net new stores. The UK had three net new stores.
This brings its total estate to 360 stores worldwide – 185 of which are in the UK – trading from 14.8 million sq ft compared to 13.9 million sq ft a year ago.
Primark said full year operating margin at this stage was expected to be broadly in line with this year.
However, it warned that the exchange rate applicable to purchases in the second half would be sensitive to sterling exchange rate volatility which is likely to arise given a period of intense Brexit negotiations.