Primark half-year profits surge 25%

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Primark
// Primark records surge in half-year profits as customers continue to flock to the value retailer
// Adjusted half-year operating profit jumped 25% to £426m while sales grew 4% to £3.6bn
// Like-for-likes slipped 1.5% but margins “much higher”
// Primark sales increased 2.3% and like-for-likes was up 0.6% in the UK

Primark has posted a jump in its half-year profits as growth in its UK market continued to drive its overall performance.

The value retailer, owned by Associated British Foods, saw adjusted operating profit jump 25 per cent to £426 million in the six month period ending March 2, while sales grew four per cent to £3.6 billion.

While overall like-for-like sales dipped by 1.5 per cent, ABF said profit margins were “much higher”.

At home in the UK, sales were up 2.3 per cent and like-for-like sales saw a 0.6 per cent uptick.

ABF added that Primark’s share of the clothing, footwear and accessories market in the UK increased substantially in the period, bucking the trend of wider high street malaise.

In addition, Primark does not trade online like its competitors and has continued to expand its bricks-and-mortar footprint worldwide.

In the current fiscal half, the retailer opened the biggest store in its global estate in Birmingham to much fanfare.

The strong Primark performance helped ABF record a two per cent rise in turnover to £7.5 billion, although pre-tax profit was knocked back by a £79 million exceptional charge linked to pensions and its bread-making arm.

ABF’s sugar division also saw profits take a knock as the result of “significantly lower” prices which affected the sector.

Pre-tax profit came in 15 per cent lower at £515 million in the period.

Profits dived from £106 million to £1 million.

Meanwhile, ABF’s grocery arm recorded a three per cent sales rise to £1.7 billion while profits jumped two pet cent at constant currency to £167 million.

ABF chief executive George Weston hailed the company’s half-year results as “robust”.

“Profit at AB Sugar was substantially reduced but, from this period, we expect our sugar profitability to improve,” he said.

“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.”

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