Penneys add up for ABF’s gem in the Irish market

When the UK’s Brexit transition period ended as the bells rang out for new year in January last year, it ushered in a new era of financial transparency for international retailers that operate in the Irish market under the ultimate aegis of British managers.

As a consequence of the fact that Britain was no longer subject to single-market rules, Irish retailers that were controlled from Britain, and which previously had kept their performance from public view being included in overall company results, suddenly found themselves being advised by accountants to publish their financial statements. It has to do with an obscure accounting rule and being controlled from outside the European Union.

Aldi Ireland, which effectively is run as a unit of the German retailer’s UK operation, was among the first to throw open its financial books for public scrutiny. Others in the industry here, such as Tesco, may yet follow. Now Primark in Ireland has gone the same way, this week filing public accounts for the first time.

Primark, which operates in this market as Penneys, was founded in Ireland and is still officially headquartered here. But it is ultimately controlled by Associated British Foods (ABF). Regardless of where the ultimate decisions are made, its debut public accounts in Ireland show the old sod is good to the company.

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Penneys’ sales of €482.2 million for the 53 weeks to the middle of September 2021 include 23 weeks of Covid-enforced closure: five weeks of pre-Christmas closure in late 2020 and the 18 weeks or so from the new year to May 10th, when its stores reopened.

Conservatively allowing for some inevitable pent-up demand impact, it is obvious that, before the pandemic, Penneys may have been pulling in €600 million or more from its portfolio of 37 Irish stores. That is an impressive average of €16 million per outlet in sales each year.

No wonder it was able to afford a €200 million cash dividend to its owner in October 2021, and a further €275 million in January this year, as outlined in the accounts. Watch the Penneys, and the pounds look after themselves for ABF.