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Primark owner Associated British Foods posts £466m profits

Published 19/04/2016

Primark profits were down 3% to £322 million although sales rose 5% to £2.6 billion
Primark profits were down 3% to £322 million although sales rose 5% to £2.6 billion

Primark owner Associated British Foods has announced half-year pre-tax profits up 4% to £466 million.

The company said like-for-like sales at Primark compared to the same period last year were broadly flat, with warm weather across Europe hitting its performance. Profits at the budget fashion retailer were down 3% to £313 million although sales rose 5% to £2.6 billion.

It added that trading at its two US Primark stores has been "encouraging" and it plans to opens six more outlets in the country this year.

Overall, group revenue declined 2% to £6.1 billion.

Associated British Foods chief executive George Weston said: "These results demonstrate underlying progress for all of our businesses in the period despite currency.

"Good buying and selling space expansion continued at Primark, cost reduction and performance improvements contributed to a better result at Sugar, profits were well ahead at Ingredients, and profit margins improved at Grocery and Agriculture."

Sugar sales fell 9% to £843 million but the division delivered a £6 million profit, driven by cost savings. Profits at ABF's grocery unit, which houses Twinings tea and Ryvita, rose 2% to £130 million.

The group added that its currency problems have started to ease.

"The weakening of sterling in recent weeks, particularly against the euro, will ease the effect of currency translation on this year's results assuming current rates prevail, reducing our previous estimate of £25 million to £10 million," ABF said.

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