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Primark owner Associated British Foods reports surge in full-year profit

Revenue for Primark alone increased by 19% to £7.05bn – thanks to a particularly strong performance in the UK 

Josie Cox
Business Editor
Tuesday 07 November 2017 08:54 GMT
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The group said it anticipated that the budget clothes chain would continue to expand in the year to come
The group said it anticipated that the budget clothes chain would continue to expand in the year to come (Getty)

The company that owns Primark reported a more than 20 per cent surge in profit for its most recent financial year, largely thanks to strong earnings at the low-cost fashion chain.

Associated British Foods on Tuesday said that group revenue had risen 15 per cent to £15.4bn in the year to 16 September. Revenue for Primark alone increased by 19 per cent to £7.05bn – thanks to a particularly strong performance in the UK. Overall group adjusted operating profit jumped by 22 per cent to £1.36bn.

“This was a highly successful year for the group,” said George Weston, chief executive of ABF. “These results reflect our international diversity, and the strong underlying performance of our businesses was driven by management actions throughout the year,” he added.

He said that capital investment had hit a record during the year, as ABF “continued to pursue the opportunities to grow our businesses into the future”.

In addition to Primark, ABF also owns a big sugar, grocery, agriculture and ingredients business, employing around 133,000 people in 50 countries. Looking ahead, the group said that it anticipated that Primark would continue to expand in the year to come, helping retail profits to rise further. It said that it also expects progress in its grocery, agriculture and ingredients divisions.

“Taking all of these factors into account, at this early stage, we expect progress in adjusted operating profit and adjusted earnings per share for the group for the coming year,” chairman Charles Sinclair said.

Commenting on the likely impact of Brexit on ABF’s performance, the company said that the UK’s departure from the EU could affect the diversity of its operations and its geographical footprint. But it also said that changes in legislation and trade agreements “provide significant opportunities for the food industry to replace imported food and build export markets and, for UK agricultural policy particularly, they have the potential to benefit our group”.

ABF said that it was “engaged at all levels with a number of UK Government departments to ensure that the full range of opportunities and risks, as they affect us, are recognised”.

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