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City says Primark's profits will surge

Primark is expected to report strong growth in profits but flat like-for-like sales next week, according to the City, as it continues to expand its store portfolio.

Analysts forecast that pre-tax profits at the value retailer, which is due to post its half-year interim results on April 24, will rise by up to 12%.

Mirabaud Securities analyst Julian Lakin said he expected profits to reach £99 million, compared with £87m last year. "Most of the growth will come off the back of the Littlewoods store conversions," he said. "In the future, Primark will continue to grow by opening more stores in the UK and in Europe."

ABN Amro analyst Julian Hardwick expected pre-tax profits to hit £94m.He said the retailer was still a long way from reaching saturation point in the UK marketplace. "Primark will continue to add to its store portfolio. I don't think the opening of the London Oxford Street store will have a significant impact on its next set of results, but it will certainly have a stronger impact in terms of building its profile."

Another analyst predicted that Primark's sales would increase by 13%, from £671m to £767m.

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