Penneys owner to repay Covid supports received from State
Retailer has 36 stores waiting to reopen in the Republic and another 11 in the North
Penneys on Mary Street, Dublin: The retailer’s Irish stores remain closed. Photograph: Cyril Byrne/The Irish Times.
Penneys owner Associated British Foods (ABF) has said it intends to repay the State the money it has received in supports to cope with the Covid-19 pandemic.
The Government introduced a range of business supports last year as shops were shuttered in order to curb the spread of the virus.
ABF announced on Tuesday its intention to repay the £121 million (€140 million) in supports for which it was eligible across its UK and European trading countries in the financial year up to this date. This figure includes a £72 million repayment to the UK government.
It also said there are “no plans to make any further claims from these schemes for which we would be eligible from this date”.
A spokesman for ABF confirmed the Irish Government was included in the plan.
“Ireland is included in that figure, but we are not yet providing further detail beyond what is in the results announcement,” he said.
There are currently 36 Penneys stores waiting to reopen in the Republic, and another 11 in Northern Ireland which are scheduled to reopen on April 30th. In the UK, the retailer trades under the name Primark.
Results for ABF published on Tuesday show operating profit at Primark/Penneys fell 90 per cent to £43 million in the first half. The discount fashion retailer increased its estimate of the sales that will be lost due to trading restrictions in the second half of the year.
Although many of its stores in England have set trading records since reopening on April 12th, and those in Scotland are set to do so on Monday, trading in Europe has been “mixed”, ABF said in a statement that outlined its performance in the 24 weeks ended February 27th.
Some store reopening dates have been delayed while some have reopened but with restricted trading in place. As a result, it expects to forgo some £700 million of sales in the second half, up from an earlier estimate of £480 million.
It said its US business had turned profitable and that the period after reopening in Europe would be unusually cash generative as paid-for inventory is sold through.
The company confirmed that it will pay an interim dividend of 6.2p a share in July.
The outlook for ABF’s sugar, grocery and ingredients businesses in the second half was also muted after an “exceptional” first six months.
In a statement, ABF chief executive George Weston said 30 employees at the company have died as a result of Covid-19. “We mourn them all,” he added.
– Additional reporting: The Financial Times