Primark cheered by busy Christmas

 

Budget retailer Primark saw sales boom over its Christmas trading quarter as it continues to build up its presence on the high street.

Primark owner Associated British Foods said total sales at its 232 stores across Europe were up 16% in the 16 weeks to January 7 compared to a year earlier.

It described the Primark sales performance as "exceptional" and while it did not provide a figure excluding store openings it said the like-for-like sales growth was "good", helped by particularly strong trading over Christmas.

The period was a busy one for store openings as the company unveiled two new shops in the UK, including a flagship store on Edinburgh's Princes Street.

Stores also opened in Spain, Germany, Portugal and the Netherlands, bringing the total number of openings for the quarter to nine. It has 156 stores in the UK.

Together with strong growth in its sugar business and an improved performance at its Kingsmill-branded Allied Bakeries division, AB Foods said revenues were 12% higher in the 16-week period.

Kingsmill, however, did have its margins squeezed by what the group described as "strong competition".

The brand's mixed fortunes were similar to the wider picture for the group's international grocery businesses, which saw combined revenues grow by 4%.

Its Twinings and Ovaltine brands were buoyed by increasing demand for tea in the United States and Ovaltine hot malt drinks in developing markets.

But difficult trading conditions for Australian subsidiary George Weston Foods were compounded by a lack of efficiency driving up costs at a new meat factory in Castlemaine, Australia.

The best performances for the group came from the agriculture and sugar divisions, with revenue growth during the period at 22% and 21% respectively.

Falling cotton prices also look set to help Primark, with the benefits of lower input costs expected to ease pressure on its margins.

Looking ahead, Associated British added: "We expect growth in sales and adjusted operating profit in the coming year, with the profit improvement weighted towards the second half."

PA

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