20th Jan 12
Primark deliver strong Christmas results
by Katie Naylor
Not feeling the pinch: Primark now has more than 150 stores in the UK
Not feeling the pinch: Primark now has more than 150 stores in the UK
Budget retailer Primark saw a boom in sales during the fourth quarter as it continues to see its stature grow on the high street.
Associated British Foods, the owner of Primark, said that overall sales at its 232 outlets across Europe had risen by 16 per cent during the 16 weeks ending 7 January in comparison with the same period a year earlier.
It said that the retailer’s sales performance was “exceptional” and, although it did not give a figure that excluded store openings, it described the growth in like-for-like sales as “good”, saying they were helped by an especially strong trading period over Christmas.
It was a busy period for store openings, with Primark unveiling two new stores in Britain, including a flagship outlet on Princes Street in Edinburgh. Stores also opened in the Netherlands, Spain, Portugal and Germany, bringing the overall number of openings during the quarter to nine. There are 156 Primark stores in the UK.
After its sugar business delivered strong growth and its Kingsmill-branded Allied Bakeries arm showed an improved performance, AB Foods said that revenues were up by 12 per cent over the 16-week period. However, Kingsmill’s margins were squeezed by what was described as “strong competition” by the group.
The mixed fortunes of AB were comparable to the wider picture of the group’s international grocery operations, which saw an increase of four per cent in combined revenues. Its Ovaltine and Twinings brands were helped by increasing demand for Ovaltine hot malt beverages in emerging markets and demand for tea across the US.
However, tough trading conditions for George Weston Foods, the Australian subsidiary, were added to by a lack of efficiency, which forced costs up at a new Castlemaine-based meat factory in the country.
The group’s best performance was delivered by the sugar and agriculture divisions, with growth in revenue during the period being 21 per cent and 22 per cent respectively. The fact that cotton prices are falling also looks to be a good sign for Primark, with lower input costs expected to be beneficial by way of easing pressure on its margins.
Associated British Foods said that looking towards the future they anticipate that adjusted operating profits and sales will grow in the year ahead, with the profit improvement more likely to be seen in the second half.
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