Penney's owner Associated British Foods has joined calls for a Brexit transition deal amid fears over customs chaos as it posted a 22 per cent leap in annual profits thanks to strong sales at its fashion chain.
AB Foods chief executive George Weston said the group, which also owns a food arm and sugar business, was concerned over the risk of "abrupt changes" to customs procedures. But he added that Brexit changes could also help cut imports, boost UK-sourced goods and build a better British export market.
He said: “In common with many other businesses, we share a concern about the risk of abrupt changes to the UK’s customs procedures. “We therefore welcome the Government’s intention to have a transition period beyond March 2019 in which to implement the necessary systems and processes.”
He added: “Changes in legislation and trade agreements provide significant opportunities for the food industry to replace imported food and build export markets and, for UK agricultural policy particularly, they have the potential to benefit our group.”
His comments came as the group unveiled a robust set of annual results, with underlying pre-tax profits surging by more than a fifth to £1.31 billion for the year to September 16. Its Penneys/Primark business received a boost from the weak pound and further expansion, with revenues surging by 19 per cent to £7.05 billion, while UK like-for-like sales jumped 10 per cent ahead. The group — which also owns Twinings tea and Kingsmill bread — has taken a hit to margins from increased buying costs caused by the pound’s fall since the Brexit vote and said this will continue into the first half of the current financial year. But it said overall full-year margins would be flat on the past year and it added it expects to make further “progress” in earnings for the year to September 2018.