Cotton costs will our hit margins, warns Primark
Wednesday 10 November 2010
Primark expects the soaring price of cotton to "erode" some of the uplift in profit margins the discount fashion retailer delivered in its last financial year.
The comments by the retailer's owner, Associated British Foods (ABF) – which also operates the Patak's curry pastes, Kingsmill bread and Ryvita snack brands – took the gloss off a stellar performance by Primark for the 53 weeks to 18 September.
Primark's adjusted profits jumped by 35 per cent to £341m, as total sales rose 18 per cent to £2.73bn over the period. The fashion retailer, which has 204 stores, delivered a 6 per cent rise in underlying sales on stores open at least one year, boosted by a barnstorming performance in Spain and further growth in the UK.
Primark's operating margin jumped to 12.5 per cent from 10.9 per cent, but the company said it expects some of this margin improvement to be "eroded in the coming financial year due to higher cotton prices and freight costs", as well as increases in VAT.
Adjusted pre-tax profits at ABF, which also owns the Twinings tea brand, rose by 26 per cent to £825m, driven by Primark and by a buoyant performance from its sugar division in the UK and China.
While ABF also warned on the "significant increase" in commodity prices, particularly on wheat, the group said: "The diversity of the group's operations and its broad geographic spread, together with further returns from our capital investments, serve to mitigate these pressures."
- 1 Scientists create transparent mouse complete with see-through organs
- 2 Pope Francis issues top 10 tips for happiness
- 3 Disney heiress Abigail disowns her share of family profits in West Bank company
- 4 Israel's propaganda machine is finally starting to misfire
- 5 Amazonian Indian tribe filmed making contact with Brazil village in rare video footage
Mystery of the Siberian holes at the end of the world 'solved': Scientists offer explanation
Pope Francis issues top 10 tips for happiness
Kenny Ireland dead: Benidorm actor dies aged 68
Justin Bieber posts Instagram photo of Orlando Bloom crying after Ibiza fight 'over Miranda Kerr'
Putin v Obama: Russian deputy prime minister mocks president with catty pictures on Twitter
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Boozy, ignorant, intolerant, but very polite – Britain as others see us
A new Russian revolution: The cracks are starting to appear in Putin’s Kremlin power bloc
- < Previous
- Next >
iJobs Money & Business
£300 - £350 per day: Orgtel: Financial Analyst, Forecasting, Halifax, Banking,...
£500 per day: Orgtel: Business Architect - Banking - Bristol - £500 per day A...
£200 - £500 per day + competitive: Orgtel: I am currently working on a large p...
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...