Primark owner reveals £1bn revenue climb with new record sales

The owner of a high street fashion brand has announced that its revenues have increased by £1bn since this time last year.

Associated British Foods (ABF), which owns Primark, reported today that the fashion chain saw revenues of £1.6bn in its third quarter, up by 167 per cent from last year’s £0.6bn.

The company said that the rise was due to stores reopening and “a number of new sales records”.

Commenting on Primark’s results, the group said: “Primark revenues reached £1.6bn in the third quarter with the reopening of all stores and the opening of seven new stores.

“These revenues were well ahead of last year’s third quarter sales of £0.6bn, when the first lockdowns resulted in the closure of all our stores for an average period of 12 weeks.

“This quarter, sales in the reopened stores were ahead of expectation in all markets, a number of new sales records were set and the like-for-like performance was much improved on earlier periods during this pandemic reflecting an increase in both confidence and willingness to spend by our customers.

“Primark’s like-for-like sales were 3 per cent up on a two-year basis in the quarter, but volatility remains high and performance varied by region depending on the degree of restrictions related to Covid-19.”

ABF also reported today that its grocery division saw a decline of three per cent in the quarter, with its ACH, George Weston Foods and UK Grocery brands all seeing a drop in demand.

However, it added that it had seen a rise in sales of its Twinings Ovaltine brand, especially in overseas markets such as Thailand.

It also said that although sales at its other grocery brands - AB World Foods, Jordans and Dorset Cereals, Ryvita, Silver Spoon and Acetum - have dipped, they all have higher sales than reported pre-Covid.

Ingredients revenues climbed by three per cent, and sugar sales were also up, with revenue growth of 21 per cent across the quarter despite a climb in world sugar prices. The group’s agriculture brands saw revenue growth of 10 per cent in the period.

ABF commented: “As expected, grocery revenues in the third quarter were lower than last year, with a decline of 3 per cent.

“Third quarter sales last year were very strongly ahead of the prior year, with an increase of 9 per cent, with much higher retail channel volumes as a consequence of the first lockdowns across our major markets.

“Sugar revenues in the quarter were significantly ahead, driven by strong volumes in Illovo and China and higher prices in Europe and Africa.

“Group cash generation in the quarter was both ahead of expectation and much stronger than in prior years.

“Net cash before lease liabilities for the group increased from £705m at the beginning of the quarter to over £1.45bn at the end of the quarter.

“This improvement was mostly delivered by recovery in Primark sales along with a reduction in the inventories which had built up during lockdown.

“For the full year, we now expect that the improved performance at Illovo will result in a higher adjusted operating profit at AB Sugar.

“Adjusted operating profit at grocery is expected to be lower than last financial year primarily driven by lower margins at ACH.

“Following the encouraging sales performance by Primark since stores reopened this quarter, we now have higher expectations for final quarter sales.

“Our forecast for full year sales at Primark has increased accordingly and adjusted operating profit, stated before repayment of job retention scheme monies, is now expected to be broadly in line with last year.

“Our outlook for the adjusted operating profit for the group, stated before repayment of job retention monies is now in line with last year.”