Value clothing retailer Primark’s profit dropped by 8% due to high cotton prices and the 20% VAT increase in January, it said in its year end results.

For the year to September 17, the retailer said it “chose to forfeit increased profitability for the support of its loyal customer base” by absorbing the cost of rising raw material prices. This pushed its adjusted operating profit from £335m in 2010 down to £309m.

Revenue for the year jumped 13% to £3bn and like-for-like sales increased by 3%.

Store expansion was “very strong”, the retailer said, opening 19 stores in the period, bringing the total number of stores to 223. Eleven new stores opened in the UK, three in Spain – including two in the Canary Islands – two in both Portugal and Germany and one in the Netherlands.

Owner, Associated British Foods, said it was planning to continue its investment programme in Primark at a similar level to last year.

In the current financial year Primark will open a store on Princes Street in Edinburgh just before Christmas, a second store on Oxford Street will open its doors in summer 2012. It has also opened concessions in two Selfridges stores, in Manchester and Birmingham, as revealed by Retail Week last month.

Since the year end, three more stores have opened in Portugal, Spain and Germany and Primark believes that “strong consumer demand” in Europe lends itself to confidence in future growth as it develops plans to install a new distribution centre in northern continental Europe.