Associated British Foods warns of £1.05 billion loss of sales at Primark on store closures

Thu, 14th Jan 2021

Primark-owner Associated British Foods warned on performance of Primark after estimating a loss of sales of £1.05 billion should stores remain closed through February. The company said it now expected full year sales and adjusted operating profit for Primark to be 'somewhat lower' than last year. The lower profitability of Primark, and the consequent change in the weight of profit by tax jurisdiction for the group would result in an increase in the group's effective tax rate for the year from the 25% previously advised, it added. The update comes as the company reported that revenue in the 16 weeks to 2 January 2021, fell 13% to £4.8 billion year-on-year with Primark sales down 28%. The retail performance was 'materially impacted by the increased lockdown restrictions in the UK and Continental Europe during November and late December,' the company said. Associated British Foods estimated the loss of sales in the periods of closure during these 16 weeks was £540m. Sales were strong in stores that were open during the festive season as the company operated extended opening hours in a number of stores in the lead up to Christmas. Its sugar and grocery division saw sales up 6% and 8% respectively, driven by higher prices for British sugar and strong growth in its UK grocery businesses. 'The performance of sugar, grocery, ingredients and agriculture has been very strong to date and for the full year our expectation remains for adjusted operating profit in aggregate from these businesses to be well ahead of last year,' the company said. Story provided by StockMarketWire.com

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