ASSOCIATED British Foods (ABF) said yesterday that “remarkable” results at its discount clothing chain Primark helped the FTSE 100 giant report a 13 per cent jump in profits.
Primark’s adjusted operating profit rose 44 per cent to £514m in the year to 14 September, overtaking the £435m of profits at ABF’s sugar division, which was hit by a drop in European sugar prices.
Sales at Primark, which make up a third of ABF’s group sales, jumped 22 per cent ahead to £4.3bn, largely thanks to new store openings and sales growth of five per cent at stores open over a year.
Chief executive George Weston said the group was still in the “very early days” of growth in continental Europe, with only 10 Primark stores in Germany to 161 in the UK.
The retailer will open its first store in France in December, one of 13 openings it is planning in time for Christmas, including five in Spain. It plans to open 1m square feet of selling space in the coming year after adding 0.8m sq ft last year, taking the total number of stores to 257.
The group gave a cautious outlook for the year and forecast another fall in profit at its sugar business as the planned ending of EU sugar quotas in 2017 puts pressure on prices.
Its grocery arm, which includes Silver Spoon sugar, posted a 24 per cent profit rise, thanks to efforts to restructure parts of the business.