Primark sees profits grow 29pc in ‘magnificent’ year

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High street giant Primark saw its profits grow 29 per cent to £662m in a “magnificent” year for the discount retailer.

The chain recorded sales of £4.95bn in the 12 months to September 13, a jump of 16 per cent on the previous year.

It is now planning to continue expansion through Europe and launch in the North-East US.

Parent company Associated British Food said the retailer, which focuses on low-cost, on-trend clothing, had “substantially out-performed” in its year end results.

George Weston, chief executive of Associated British Foods, said: “Primark’s trading success and significant expansion delivered another magnificent year.”

Like-for-like sales grew four per cent for the period, with additional growth driven by expansion of its estate and “superior sales densities” in its new stores. Profit margins rose to 13.4 per cent from 12 per cent.

The last year saw strong performance across its autumn/winter and spring/summer ranges, driven by “excellent” Christmas sales and a busy third quarter due to warm weather.

Primark added 1.4m sq ft to its stores, through three store expansions, three relocations and 25 new locations. It now holds a total of 10.2m sq ft across 278 stores, having grown from 1.4m sq ft in 2000.

Associated British Foods said there is a “very strong pipeline” for Primark in Europe and will open its first US stores in late 2015, with up to 10 by end of 2016.

This year’s results included a $5m (£3.1m) compensation for the workers and families affected by the 2013 collapse of Rana Plaza in Bangladesh. It has set aside a total of $12m of support. It also carried out structural assessments of all of its suppliers’ factories in the region. It also carried out more than 2,000 audits of suppliers in an effort to improve visibility and ethical trading.

Nicolas Ziegelasch, head of equity research at Killik & Co, said Primark continues to be the “star performer” for Associated British Foods, with management expecting “strong growth” through 2015.

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