BARGAIN HUNTERS BOOST FOR PRIMARK
THRIVING: Weston said Primark profits would be 'well ahead'
By Peter Cunliffe, Deputy City Editor
DISCOUNT clothing chain Primark yesterday defied the gloom hanging over the high street to report better-than-expected spring and summer sales.
Parent company Associated British Foods said the chain was on track to show a sales rise of 2 per cent, excluding new shops, in the six months to September 13.
Analysts said Primark had enjoyed a recovery in sales after seeing a flat performance in the first three months, suggesting a rise of 2 per cent in the second quarter.
AB Foods’ finance director John Bason said although the UK retail environment was tough, prospects were better for a value retailer such as Primark.
“We have the right merchandise, good ranges and stock levels are good. Trading is very brisk,” he added.
Primark opened eight stores during the period, including five in Spain and three in the UK, taking the total number of shops to 181. The group, headed by chief executive George Weston, said full-year sales and profits at Primark would be well ahead of last year.
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We have the right merchandise, good ranges and stock levels are good.
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Analyst Polly Barclay at broker Cazenove said: “While trading at Primark is not immune to the slowdown, a like-for-like gain of 2 per cent is a good result in the context on the UK high street.”
Clothing’s performance helped offset the sugar business where profits have fallen substantially after European Union reforms of the market depressed prices.
In its trading update, the company said its grocery business, which includes Kingsmill bread, Ovaltine and Twinings tea, enjoyed strong sales and profits as it passed on higher raw material and energy costs by raising prices.
Annual results will also be affected by higher interest charges because of increased debt to finance acquisitions.
Company brokers Credit Suisse and Panmure stuck to profit forecasts of £625million and £630million respectively.
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