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Primark has seen its half-year operating profit jump 25% to £426m during the six months ending 2 March.
Primark said the increase reflected “its continued selling space expansion and improved margins, which were driven not only by favourable exchange rates but also by better buying”.
Sales at Primark were also 4.4% ahead of last year, driven by increased retail selling space partially offset by a 1.5% decline in like-for-like sales. Primark added that the UK continued to perform well with sales 2.3% ahead of last year, like-for-like sales grew by 0.6% and it revealed its share of the total clothing, footwear and accessories market increased “substantially”.
The budget clothing retailer added that the effect of low footfall in November was offset by “good trading” in all other months of the first half, with strong growth in the last two weeks of the period compared to a spell of very cold weather last year. Sales in the Eurozone were also 5.3% ahead of last year at constant currency.
Primark added its retail selling space increased by 0.3 million sq ft since the financial year end and, at 2 March 2019, 364 stores were trading from 15.1 million sq ft compared to 14.3 million sq ft a year ago.It also expects to add 950,000 square feet of new selling space in this financial year, comprising stores in new locations and additional space from relocations. This includes the recently opened Birmingham High Street which, at 160,000 sq ft, became its largest ever store.
Primark’s results helped its parent company, Associated British Foods, see a 2% rise in group revenue to £7.5bn. However the statutory operating profit for the period was 14% down at £534m which was hit by an exceptional items charge of £79m and “expected” reduction in profit at AB Sugar.
Pre-tax profit also decreased by 15% to £515m during the period, despite this George Weston, chief executive of Associated British Foods called the results “robust”.
He said: “This is a robust set of results. Profit at AB Sugar was substantially reduced but, from this period, we expect our sugar profitability to improve. 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.”
