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Primark beats expectations with profits up 26%

Profit growth at Primark has again beaten expectations by rising 26% in the six months to March 1, ahead of the 21% forecast by analysts.

The fast-fashion chain, which today announced it will launch in the US next year, grew turnover 14% to £2.3bn while profits rose to £298m – “an excellent performance by any standard”, according to George Weston, chief executive of parent company Associated British Foods. Like-for-likes rose 4%, in line with expectations.

Full-year expectations are for Primark’s profits to be “well ahead”.

The company increased retail selling space by 600,000 sq ft since the last financial year end, and by 700,000 sq ft – equivalent to 8% – since this time last year. In total, 16 new stores opened, including three in the UK and two in France.

The pace of openings is being ramped up, with a further 500,000 sq ft expected to be added by the end of the financial year, including three stores in France, two in Berlin and three in the UK.

Outside of the UK, Spain and Portugal both experienced double-digit growth, while northern Europe was “very strong”, Weston said. Initial trading from the first French stores has been “very encouraging”, ABF added.

To support this growth, the group is building warehouse capacity in Germany and Spain.

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