Primark sales growth slows down

Weaker trading over the Christmas period created a marginal drag on first half revenues at discount clothing retailer Primark.

The Irish-founded company, which trades here as Penneys, yesterday posted first half revenues of just under £2.67bn (€3.38bn), for the six months to the end of February — up 5% year-on-year but ahead less than 1% on a like-for-like basis.

Unseasonably warm weather across northern Europe damaged like-for-like sales while the positive impact of new openings in certain markets also eased.

Operating profit fell 3% to £313m.

Primark’s parent, Associated British Foods (ABF) posted a 2% year-on-year rise (in constant currency terms) in group revenue to £6.1bn, with adjusted operating profit rising by 5% to £486m.

ABF chief executive George Weston said the figures show the underlying progress the group is making despite currency headwinds.

Management said business would not be largely affected by a Brexit as it has a natural hedge between euro and sterling earnings and a localised supply chain.

“ABF is an international business with diverse interests across 48 countries and a business model that, wherever possible, aligns production with the end markets for its products,” said chairman Charles Sinclair.

“Primark operates discrete supply chains for its stores in each of the UK, US and eurozone. We undertake relatively little cross-border trading between the UK and the rest of the EU.”