Primark has reported an “outstanding” performance for the past year, with operating profits up 35%, but its owner warned that future margins will be squeezed by the soaring costs of cotton and transport.
Associated British Foods (ABF) said sales at the fast-fashion retailer were up 18% to £2.7 billion in the year to September 18, while operating profits hit £341 million, helped by 13 new stores, including its first in Belgium.
Primark will continue to open new stores, particularly in Spain where growth has been strong.
The strong growth helped its parent company to increase sales by 10% to £10.2 billion while adjusted profit before tax increased 26% to £825 million.
ABF makes Kingsmill bread, which grew market share with the launch of the Little Big Loaf a year ago, but warned that margins are due to be squeezed by the rising cost of wheat.
The company also makes Silver Spoon sugar, the Patak’s spicy food range and Twinings tea.