Expansion helps profits at Penney's to rise by 20%

Profits at Primark, the Irish-based retail clothing group that trades in Ireland as Penney's, rose by 20 per cent to £200 million in the year to the end of September.

Revenue, meanwhile, increased by 37 per cent to £1.6 billion during the period, according to results published yesterday by its parent company Associated British Foods (ABF).

This strong performance was helped by the addition of 32 new stores, including Penney's outlets in Ballina, Co Mayo, and Swords, north Co Dublin.

It also included the conversion of former Littlewoods stores in the UK.

ABF said trading in Ireland continued to be "very strong" last year.

"The Irish estate expanded with the opening of two new stores and extensions to existing stores, particularly at the successful location at Blanchardstown, west of Dublin."

Penney's operates 37 stores in the Republic, with a new outlet planned for Cork in the current financial year.

"We are pursuing further opportunities to expand selling space in our established markets in the UK and Ireland, but this is likely to be at a less rapid rate than in the past two years. We expect to build on our encouraging start in Spain," ABF said.

Overall, Primark's retail selling space increased by 1.3 million sq ft during the year to 4.8 million sq ft.

Primark, which is headed by veteran Irish retailer Arthur Ryan, said its like-for-like sales growth was 1 per cent during the year.

Like-for-like sales for stores "unaffected by new openings" was 7 per cent, the company added. "This was achieved despite the impact, common to other clothing retailers, of poor weather over the summer months," ABF said yesterday.

The company said trading in its two stores in Spain "exceeded" expectations. "Like-for-like growth in Madrid, just over a year from opening, is very strong, and the sales density exceeds the average for the UK and Ireland."

Primark has expanded rapidly in recent years as consumers have warmed to its value-based range of clothing. Primark now operates 170 stores in Ireland, the UK and Spain, and employs 23,500 staff. TNS ranks it as the UK's second biggest clothing retailer by volume.

ABF's group revenues rose by 13 per cent to £6.8 billion, while its adjusted operating profit was up 11 per cent to £622 million.