Value clothing powerhouse Primark has posted a big rise in full-year profits, helped by factors such as lower costs.
Primark’s adjusted operating profit rose 51% to £1.1bn in the year to September 14, when sales advanced 6% to £9.45bn. Parent company ABF said there was a “strong performance” in Primark’s key growth markets including the US, France, Spain, Italy and central and eastern Europe, as well as growth in the UK and Ireland, which is Primark’s biggest market.
In the UK and Ireland, which accounted for 47% of sales, revenues rose 2%. Like-for-like sales edged ahead 0.7% – up 3.1% in the first half and down 1.6% in the second, when footfall was hit by poor weather.
The retailer said that the rise in profits and margin was “largely due to lower material costs and reduced realised freight costs, as well as the annualisation of prior year price increases”.
ABF chief executive George Weston expected Primark to continue to do well, saying: “Our low-cost model is as strong as ever, as we maintain our relentless focus on delivering great-value clothing and a unique store experience. This is underpinned by a step up in investment in strategic initiatives across digital, product and brand. Significant white space for new stores remains across Europe and the US, which we expect to help drive sustainable growth over the medium and long term.”
In the current year, Primark is targeting mid-single-digit sales growth and adjusted operating margin is expected to “remain broadly in line with this year’s level”.
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