Primark reports sales rise of 13 percent

Associated British Foods in its trading update for the 40 weeks to June 20, 2015 said that group revenue was 2 percent ahead of the same period last year at constant currency, and was level at actual exchange rates. Sales at Primark were 13 percent ahead of last year at constant currency, driven by an increase in selling space of 8 percent. As a result of the weakening of the euro against sterling, total sales increased 9 percent at actual exchange rates.

Sales on a like-for-like basis in the last 16 weeks were in line with last year's performance and continue to be held back by the impact that opening new stores in the Netherlands and Germany. Spain, Portugal and Ireland all performed very strongly and the UK continued to deliver a positive like-for-like performance. Stores in France, excluded from the like-for-like measure, also continued to trade very strongly.

Since the half year, the company opened two new stores in Germany and one in Belgium. It closed one store in Leeds, following the success of the 81,000 square foot store opened in the nearby Trinity shopping centre in December 2013. The company also closed two small stores in Margate and in Naas in the Republic of Ireland. The company is all set to open its first US store, in September 2015, at Boston along with expansion in European region with the opening of three stores in Italy.

Its warehouse in Bethlehem, Pennsylvania is being prepared for the Boston store opening and, following expansions in Torija in northern Spain and Mönchengladbach in Germany earlier this year, the company will also open a new warehouse this autumn in Bor on the western border of the Czech Republic. Next year, it plans to relocate UK warehouse capacity from Magna Park to Islip in Northamptonshire, near to our existing warehouse at Thrapston.

Since Primark sources much of its merchandise in dollars, the impact of currency on results for the next financial year will be more significant than this year and arises from transactional currency exposures, primarily in British Sugar and Primark.