Associated British Foods Sees Profit Cut By Half Due To Primark Closures
Associated British Foods has reported a halving in first half profit, impacted by COVID-19 lockdowns which shuttered its Primark fashion stores.
The group, which also owns major sugar, grocery, agriculture and ingredients businesses, said it made adjusted profit before tax of £319 million (€370 million) for the six months to 27 February, down from the £636 million (€737 million) it reported for the same period of its 2019-20 year.
Group revenue fell 17% to £6.3 billion, driven by the loss of retail sales as a consequence of the trading restrictions placed on Primark.
Primark's adjusted operating profit slumped 90% to £43 million. The retailer does not trade online.
“I am proud of how our people have responded to the many challenges presented by COVID-19," said George Weston, chief executive of Associated British Foods. "Our food businesses delivered an exceptional increase in adjusted operating profit of 30% and we have provided safe and nutritious food under the most demanding of conditions."
With the majority of its Primark estate closed for more than half the period, the group's management team demonstrated "operational agility in response to the measures employed by governments to tackle the pandemic", Weston added.
"Primark sales after store reopenings demonstrate the relevance and appeal of our value-for-money offering. We are excited about welcoming customers back into our stores as the lockdowns ease and are delighted with record sales in England and Wales in the week after reopening on 12 April.
"With our success in a number of new markets, as wide-ranging as Poland and Florida, we are as convinced as we have ever been in the long-term growth prospects for Primark."
At group level, Associated British Foods said that statutory operating profit fell by 8% to £320 million. Exceptional charges for the period were £25 million, compared to £309 million in the last financial year.