Belfast Telegraph

Brexit both positive and negative for Primark owner

Primark's owner has said currency movements following Britain's decision to leave the European Union will have both positive and negative repercussions for the firm.

Associated British Foods warned that UK profit margins at the retailer would be hit by the falling pound, but the strengthening euro would lead to stronger overseas profits at its sugar business.

The company said sales at Primark rose 7% in the 40 weeks to 18 June, although they were hit by "unpredictable weather patterns" in April.

ABF said: "Sterling has weakened significantly since the referendum vote. In our next financial year, these rates would have both positive and negative effects on profit.

"There would be an adverse transactional effect on the profit margin on Primark's UK sales, currently half of its turnover, a favourable transactional effect on British Sugar's margins and a translation benefit on group profits earned outside the UK, which last year were some 50% of the total."

The firm added that it will press ahead with expansion plans for Primark, and has earmarked openings across Europe and the US.