Sales at discount retailer Primark rose by 9%, on a constant currency basis, in its latest financial year — largely driven by growth at its Irish operations.
Primark — owned by diversified multinational group Associated British Foods (ABF) — trades in Ireland under the Penneys brand.
The business said revenue for the 12 months to the middle of September rose from just under £5.35bn to £5.95bn. Adjusted operating profit, in constant terms, was up by 1% at £689m.
Primark said that warm weather in the pre-Christmas period, followed by a very cold March and April led to like-for-like sales falling by 2%.
“The UK like-for-like performance was in line with this, but Ireland delivered a strong sales performance throughout the year,” it said.
The company added that its operations in mainland Europe — it has a presence in Germany, the Netherlands, France, Austria, and Spain — traded well, while its brand has been well-received in its first year of trading in the US.
The business said it was encouraged by trading at its first store in Italy and at its five US outlets, adding that a further 1.3m sq ft of selling space is set to come on stream in its current fiscal year.
On an overall group basis, ABF — whose interests cover retail, sugar, ingredients, agriculture, and grocery — grew its revenue by 4% in its latest financial year to £13.4bn, with adjusted operating profit rising by 3% to £1.12bn.
Management said it expects progress to be made in both adjusted operating profit and adjusted earnings in its new financial year.
“The recent decline in the value of sterling presents both benefits and challenges to the group,” said ABF chief executive George Weston.
“The diversity of our operations and our broad geographical footprint — combined with a strong balance sheet — equip us well to take advantage of these opportunities as they arise.”
ABF’s group earnings, management said, could benefit from ongoing current exchange rates through the translation of overseas profits. However, as Primark buys much of its merchandise in US dollars and sells in the UK in sterling, there will be an adverse effect on its British margins.
“Changes in legislation and trade agreements, particularly in the areas of trade tariffs and UK agricultural policy, have the potential to benefit the group and the current level of sterling offers UK food producers significant opportunities to replace imported food and build export markets,” said Mr Weston.
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