It must be because of tough economic times that increasing numbers of people are hitting Primark for £3.50 pairs of jeans, as the clothing chain has posted a 24% rise in sales in six months to the 2nd March, pushing interim revenues at owner ABF up 10% to £6.3bn.
ABF chief executive, George Weston, thanked ‘exceptional trading from Primark achieved during a difficult time for many retailers on European high streets,’ for a 26% rise in group pre-tax profits to £415m.
So, where’s all the growth coming from? Well, the global commodities average for the price of cotton has fallen, the US dollar has also fallen in value, and the firm has been expanding its presence throughout the UK and Europe.
Weston added: ‘We are actively searching for appropriate locations in all the countries where we operate and in the next financial year we will open our first stores in France.’
ABF’s chairman, Charles Sinclair, chimed in with some smug-sounding words: ‘The Primark success story continues. Customers in continental Europe have enthusiastically taken to the Primark brand and there is very real momentum in the addition of selling space. Encouraged by this success, capital investment will continue.’
Shareholders need to be prepared for a slower period in terms of profits, however. Opening a ton of new stores will mean that profit growth is limited, and the firm has warned of the moderation.
Elsewhere in the business, the growth is not as explosive: the grocery arm (which runs Twinings, Kingsmill bread and Ryvita) saw pre-tax profits ride from £75m to £97m on sales of £1.83bn; but the sugar business suffered a fall in profits because of the fall in the value of sugar globally.
Still, shareholders are evidently chuffed with progress: the share price is already up by 50% year-on-year, and on publication of today’s results, the share price rose 5.4%.