Booming Primark eyes more expansion
Primark set its sights on more expansion today after a "magnificent" year in which it racked up sales of nearly £5 billion and a 29% rise in profits.
The results for the year to September 13 heap more pressure on rival Marks & Spencer on the eve of its own results, when half-year profits are expected to be down by around 4% to £252 million due to weaker clothing sales.
Primark's on-trend ranges have made it a clear winner in the sector in recent years, with analysts praising its ability to mix low prices with high fashion.
Its owner Associated British Foods said the retail arm maintained the momentum into the new financial year, despite the impact of the unseasonally warm autumn on demand for cold weather fashion items.
Rapid expansion means Primark's portfolio of more 10 million sq ft in selling space is now seven times the size of its entire footprint in 2000, when it had 100 stores after 31 years of trading.
The chain added 1.4 million sq ft of selling space in the year to September, giving it 278 stores in nine countries, including 164 shops in the UK.
The chain is planning an increase of just under one million sq ft in the current year, while its next new market will be in the north-east of the United States, with up to 10 stores by the end of 2016.
Alongside store expansion, Primark's strong autumn/winter and spring/summer ranges helped like-for-like sales rise by 4%. Profits for the last financial year were £662 million.
Chief executive George Weston added: "Primark's trading success and significant expansion delivered another magnificent year."
The company's recent additions have included large stores in a number of major cities across Europe, including Lisbon, Madrid, Berlin, Cologne, Dusseldorf and Vienna. UK openings have been in Bath, Canterbury, Cardiff, Crawley, Leeds and Warrington.
The year also saw the opening of its first stores in France, including in Marseille, Dijon and three stores in the suburbs of Paris.
Mr Weston said: "We were delighted by the success of these French stores, both for the size of the crowds on opening days, which were overwhelming, but more importantly for the tremendous customer enthusiasm for Primark, in very different cities, which was sustained throughout the rest of the year."
A further five stores are scheduled to open before Christmas, including a relocation in Northampton to a store more than three times the size.
Overall, adjusted pre-tax profits at AB Foods - the FTSE 100-listed conglomerate which owns Ryvita and Ovaltine - lifted 2% to £1.1 billion as lower prices at its sugar division were offset by growth in its grocery, agriculture and ingredients units.
The group, which employs 118,000 people across 47 countries, said its overall sales slipped 3% to £12.9 billion, largely due to a strong pound and falling food commodity prices.
It said the price of wheat, barley, corn oil and rice all fell during the year.
AB Foods, which owns Silver Spoon, said falling world sugar prices meant its sugar division posted an adjusted operating profit 56% down at £189 million.
It said previous high sugar prices in 2011/2012 were due to exceptional shortages, with the market now undergoing a restructuring in Europe which will continue to see prices fall next year.
At its grocery unit it said Twinings Ovaltine delivered strong growth, which in the UK was reflected in good progress in green teas and infusions.
It said sales and profits were ahead of last year at Allied Bakeries, which launched Kingsmill Great White in February supported by a TV ad campaign. The grocery division reported an adjusted pre-tax profit 20% higher at £269 million.