Primark: Market share up as ABF thanks Rita Ora and late-arriving cold weather
Primark owner Associated British Foods reported a 2.8 per cent boost in revenues to £6.8bn in the fourth months to January, as shoppers sought out cheap clothing.
In an update to markets, the British firm said retail sales grew 7.3 per cent to £3.3bn thanks to a collaboration with pop-star Rita Ora.
The firm did warn at the start of winter that demand for warm clothing was initially slower due to unseasonable weather but trading has now picked up as the country is hit by a cold snap.
Primark’s market share in clothing, footwear and accessories grew to 7.1 per cent, up 0.1 percentage points from a year earlier.
Shares in the firm which also owns Twinings and British Sugar are up by quarter in the last 12 months, driven largely by demand for budget garments from cash-conscious customers.
However, ts agriculture arm reported a 12 per cent decline in revenues due to to continued customer destocking.
“In agriculture, sales were weaker although certain of the compound feed markets are beginning to show signs of recovery,” the firm said.
Its sugar division reported a three per cent lift in revenues and said processing of the UK sugar beet crop is under way and “indications to date are that sugar production will still be significantly above last year despite the recent weather”.
ABF also said it does not expect to be impacted by Red Sea disruptions.
Board members said: “We continue to monitor the situation in the Red Sea but at this stage we do not expect any significant disruption to our supply chain.
“At this early stage in the year we now feel more confident in the continued strong performance of both our US-focused brands in Grocery and of AB Mauri in Ingredients.”
They added: “We also feel more confident in the delivery of the Primark adjusted operating margin in this financial year, driven by a further improvement in product gross margin.
“This should insulate us well against potential additional costs of supply due to the disruption in the Red Sea should they arise.”