Primark profit surge expected

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The Independent Online

Associated British Foods (ABF), the owner of value high street fashion chain Primark, is expected to announce a surge in its annual pre-tax profit to nearly £700m on Tuesday.

Analysts at Deutsche Bank believe that the increase, up from £495m in 2009, will come off improved revenue of more than £10.1bn. Primark is ABF's "biggest profit generator" and has the greatest profit margins, Deutsche said.

Primark's strength will allow the chain's new chief executive, Paul Marchant, to enjoy his first set of results in charge. However, Deutsche warned that Mr Marchant will face a challenge to grow the business, as Primark nears the end of its UK expansion programme.

"Primark now has to demonstrate that it can succeed in Europe where many UK retailers have tried and failed historically," it said.

Mr Marchant took the reigns in September, having been chief operating officer for the previous eight months. He was previously chief operating officer at fashion retailer Next.