Primark profit to surpass last year’s

BUDGET retailer Primark, which trades as Penneys in Ireland, has said that sales and profit will be well ahead of last year but its rapid growth has slowed.

Primark, which is owned by Associated British Foods (ABF), is the first of many retailers this week to announce a trading update. Next and Debenhams are among the other retailers that will also report.

At Dublin-headquartered Primark like-for-like sales growth of 6% is expected for the full year driven by a very strong performance in continental Europe and continued good growth in Britain, it said. This however, is weaker than thefirst-half’s 8% increase.

Higher cotton and transport costs and tax increases in Britain and Spain will affect Primark’s margins next year, the company said.

Finance director John Bason said: “We’re talking about a slowing down of really very rapid like-for-like growth. We were probably up 4% in the final quarter of this year compared with about 10% last year. By any stretch of the imagination, this is strong.”

Sales and profit will be “well ahead” of last year in the 53 weeks ending September 18, led by store openings in Europe and “continued good growth” in Britain, it said. The retailer expects to have opened eight new stores in the second half of the year.

“We relocated our stores in Braehead, Scotland and Waterford, Ireland into new, larger premises and extended a number of existing stores. This will bring the total number of stores to 204 by the year end,” they said.

The company last month entered into a conditional contract to lease a second store on London’s Oxford Street, occupation of which is expected by June next year with opening planned before Christmas 2011.